#marketcycles at Play in 2026 #realestate #podcast

Why It Matters

Understanding the current acquisition‑heavy cycle helps investors allocate capital efficiently and position for higher‑margin development projects when the market pivots, directly impacting portfolio performance.

Key Takeaways

• Hines' 2025 portfolio: 50% US, 30% Europe, 20% Asia.
• 80% of activity was acquisitions, only 20% development.
• Cycle favors acquisitions; development projects are currently scarce.
• Early‑cycle development offers highest margins despite investor hesitation.
• Investors should buy now and position for upcoming development deals.

Summary

The podcast centers on Hines' strategic allocation for 2025 and how the current market cycle is reshaping acquisition versus development decisions in real‑estate. The firm disclosed that roughly half of its business resides in the United States, 30% in Europe and 20% in Asia, with an even split between living‑sector assets and a mix of logistics, retail, office, and credit.

Despite a historical 50/50 split between acquisition and development, Hines reported an 80% focus on acquisitions and only 20% on development last year, reflecting a cycle‑driven tilt toward buying assets. The hosts argue that investors are caught in a herd mentality, shunning development projects because committees reject them, even though early‑cycle development typically yields the strongest margins.

Key quotes underscore the paradox: “the blind spot investors have… is the herd mentality,” and “early‑cycle development is actually the best margins.” The speakers stress that while buying now is essential, firms must also prepare pipelines to enter development deals early, gaining “side control” before the market shifts.

The implication for investors is clear: shift capital toward acquisitions now, but simultaneously build development capabilities to capture superior returns when the cycle turns. Ignoring early‑stage development could mean missing out on high‑margin opportunities as the market rebalances.

Original Description

David Steinbach Global CIO of Hines discuss what the market is showing in 2026.