Bank of America Sees CRE Values Turning Positive, Farmland Prospects and AI-Powered Energy Demand
Bank of America's 2026 Specialty Asset Management Outlook finds commercial real estate values near an inflection point as vacancies peak, supply remains muted and transaction activity rebounds. It highlights farmland value prospects in California's Central Valley and Northern Plains and forecasts rising AI-driven power demand boosting energy and timberland sectors.
1. Specialty Asset Management Outlook Release
On May 21, 2026 Bank of America's Specialty Asset Management group published its annual 2026 outlook covering commercial real estate, farmland, timberland and energy. The team oversees over $13 billion in client assets and emphasizes real assets' low correlation to traditional portfolios and potential inflation-hedging benefits.
2. Commercial Real Estate Fundamentals Improving
After an interest-rate driven reset since 2022, commercial real estate values are approaching a turning point. Vacancies have largely peaked, forward supply remains muted and transaction volumes are increasing as more capital re-enters the market, with industrial, apartments and medical sectors leading secular demand.
3. Farmland, Timberland and Energy Opportunities
Farmland markets are recalibrating with value prospects in California's Central Valley and the Northern Plains as supply and rate pressures ease. Timberland fundamentals remain stable with growing U.S. South sawmill and bioenergy investments supporting long-term lumber consumption, while AI-driven data center growth and electrification are set to raise power demand and natural gas use.