Key Takeaways from Midloch’s 2026 Real Estate Investor Survey

Every year Midloch surveys our investors about their views on the commercial real estate market and the broader economy. Over 1,000 people have invested with Midloch, and a substantial number of them responded to the survey this year. Here are key takeaways from the results.

IRR Expectations Continue Downward Trend

51% of investors surveyed said they are making investments that they expect would result in a 14-18% internal rate of return (IRR) on their private real estate investments in 2026. 36% are investing if they believe they will see a 10-14% IRR, and 8% are expecting an 18-22% return on their private real estate investments.

As part of the total return, investors are looking for higher cash yields than in prior years; in other words, greater cash distributions as a share of the total return. More specifically, 43% are targeting a 6-8% cash yield, and 37% are targeting 8-10%.

This continues a downward trend of IRR expectations as seen in our 2024 survey, with an increased desire for cash yield.

Investors’ preferred asset classes remain multifamily and industrial properties, with 80% of respondents favoring both. Interest in multifamily has declined modestly this year, but remains wholehearted. Interest in retail real estate remains stable. Interest in office properties continued to decline in 2026 to an all-time low since Midloch instituted this annual survey. The results point to the fact that “survive until ‘25” may not have been an appropriate sentiment in the office market.

Most survey respondents believe long-term interest rates, including on 10-year Treasuries and mortgages, will stay flat (52%) or go down (38%) in 2026, with a slim share (10%) believing they will go up. Please note the survey was conducted before the war with Iran, and unfortunately, year to date, Treasury rates have spiked on fears of inflation and the ongoing war. Only time will tell if they come back to levels seen at the end of 2025.

Regarding short-term interest rates, such as on Federal funds and money markets, most respondents (62%) believe rates will come down in 2026. 35% believe they will stay flat, and only 3% believe they will rise.

A Preference for Midwest Investment Real Estate

Not surprisingly given Midloch’s focus as a Midwest-based real estate investment management firm, 79% of survey respondents expressed a preference for investment properties in the Midwest. 40% said they like the Southeast; 35%, the Sunbelt; and 29% the Rocky Mountains region. Investors surveyed could pick multiple regions of the country as “preferred.”

In the 2026 survey our investors said they are worried about world politics, the upcoming U.S. midterm elections, stock market valuations, and are unsure how to size up the rise of artificial intelligence, or AI. Some investors also are nervous about macroeconomic factors such as GDP and unemployment.

On a positive note, many investors commented on how bullish they are on commodities, including metals, and real estate.

Most Investors Plan to Increase Private Real Estate Holdings This Year

85% of investors surveyed said they plan to add to their private real estate holdings this year. 81% expect to add to their stock portfolios, 69% said they plan to make money market or bond investments, and 54% said they expect to add to their private equity investments in 2026.

Our investors, of course, are inclined to indicate interest in real estate because they already are invested in real estate. But notably they’re also generally pleased with the performance of their real estate investments, broadly defined, over time. We presume their faith reflects their belief in the fundamental strength of the asset class as an alternative investment.

If you’re an investor or prospective investor with Midloch Investment Partners and you’d like to discuss your financial goals and investment objectives, contact Alyssa Geisler, Managing Director, Investor Relations, at alyssa@midloch.com.