10 Strategic Moves to Maximize Commercial Real Estate Returns in 2026

david • January 15, 2026

Part 2 of the Investor’s Plan for Success Series

By David W. McCoy, Otimo Properties

Introduction — Why Strategy Beats Timing in 2026

For much of the last cycle, investors could rely on timing and market momentum to generate returns. In 2026, that approach will be unreliable at best and dangerous at worst.

The coming year will reward investors who act with discipline, structure, and clear strategic intent. Returns will not be accidental. They will be engineered — through careful underwriting, intelligent capital management, and proactive asset execution.

The following ten strategic moves represent the core behaviors of investors who are positioning themselves to outperform in 2026.

1. Re-Underwrite Your Portfolio Using 2026 Assumptions

Many portfolios are still being evaluated with assumptions that belong to a different market cycle. Before deploying additional capital, investors should stress-test every asset against conservative scenarios for rent growth, vacancy, cap rates, and debt service.

The purpose is not pessimism — it is clarity. Re-underwriting exposes hidden risk, identifies trapped equity, and highlights assets that may no longer justify their capital allocation.

A simple guiding question:
What breaks first if the market tightens further?

2. Target Distressed and Mispriced Assets — Selectively

Refinancing pressure, loan maturities, and shifting capital markets are creating motivated sellers across many sectors. This environment produces opportunity, but only for investors who approach distress with strong underwriting and a realistic execution plan.

Distress does not automatically equal value. Poor assets remain poor assets, even at a discount. The goal is not to buy cheap — it is to buy correctly.

3. Focus on Assets Where You Control the Value Creation

In a slower growth environment, investors can no longer depend on market appreciation to drive performance. The strongest opportunities in 2026 will come from assets where value creation is directly within the investor’s control.

This includes operational improvements, lease restructuring, cost management, and revenue optimization. The shift is from hoping for returns to manufacturing them.

4. Treat Debt as a Strategic Tool, Not a Shortcut

Debt is one of the most powerful forces in commercial real estate — for good or for harm. In 2026, conservative leverage and thoughtful term structure will matter more than maximizing loan proceeds.

If a transaction only works under perfect financing assumptions, it is not a strong deal. Investors should design capital stacks that survive uncertainty, not just enhance returns in ideal conditions.

5. Upgrade Your Market and Location Selection Discipline

Strong assets in weak locations struggle in choppy markets. The inverse is rarely true.

Investors should evaluate migration patterns, employer concentration, infrastructure investment, regulatory climate, and long-term economic drivers when allocating capital. Markets with durable demand and structural growth will outperform when conditions become less forgiving.

6. Improve Lease Structures to Stabilize Cash Flow

Cash flow reliability becomes more valuable than headline yield when volatility increases.

Investors should focus on improving weighted average lease term, strengthening escalation clauses, prioritizing credit quality, and reducing rollover risk. A stable income stream creates both operational resilience and refinancing strength.

7. Design Tax and Ownership Structures for After-Tax Performance

Sophisticated investors understand that the only return that matters is the one they keep.

Depreciation strategies, entity structuring, capital gains planning, and exit optimization — including 1031 exchanges, DSTs, and 721 structures — all play a role in maximizing after-tax outcomes.

Tax strategy is not a year-end exercise. It is an investment decision.

8. Maintain Liquidity and Capital Flexibility

Opportunity favors investors who can execute quickly.

Maintaining dry powder, lines of credit, and reliable capital partners allows investors to move when others cannot. Liquidity also provides the freedom to restructure assets, absorb volatility, and capitalize on emerging situations.

9. Build Optionality Into Every Investment

Strong investments in 2026 will not depend on a single outcome. They will contain multiple viable exit strategies.

Whether through repositioning, refinancing, recapitalization, sale, or long-term hold, investors should design flexibility into every deal. Optionality is risk management disguised as opportunity.

10. Assemble the Right Advisory Team

In complex markets, execution quality determines outcomes.

The right broker, lender, CPA, attorney, and property management team are not expenses — they are competitive advantages. Investors who surround themselves with strong advisors make better decisions, avoid costly mistakes, and move faster when opportunity appears.