Commercial real estate’s rebound from the post‑pandemic transaction drought is accelerating, with deal volume jumping sharply, according to Connor Teskey, the newly appointed CEO of Brookfield Asset Management, one of the world’s largest property owners.
“What we're seeing on the ground is far ahead of what you're reading in the headlines,” Teskey said Friday on the New York‑based firm’s first‑quarter earnings call. “We are seeing very significant increases in transaction activity, deal volumes and recovery in valuations. … We are clearly seeing the recovery accelerate.”
Teskey attributed the upswing to improving sentiment, “materially stronger” financing markets and “muted” new supply across multiple sectors. In many cases, he said, properties can still be acquired “well below replacement cost.”
Reflecting the improving market, Teskey said Brookfield expects to complete about $20 billion of real estate transactions in just a two‑month span.
Teskey, who is based in London and joined Brookfield in 2012 before rising to president in 2022, was promoted this year to succeed CEO Bruce Flatt as part of a long‑planned leadership transition. Brookfield manages more than $1 trillion across real estate and other assets and is majority owned by Toronto‑based Brookfield Corp.
Deals have been strongest in what Teskey called “alternative forms of real estate,” including hospitality, logistics and housing. While office and retail transactions have lagged so far, he said momentum in those sectors is beginning to build.
Office fundamentals tighten
“The fundamentals for office are absolutely flying,” Teskey said, pointing to the lack of new supply. Office development largely stalled beginning in 2020 amid the pandemic, followed by interest rate hikes and work‑from‑home concerns that further suppressed construction.
“We've now seen a recovery in demand that's being matched by zero new supply in the market,” he said. In Tier 1 markets, top‑end rents are now 50%, 70% and even 80% higher than five years ago — a dynamic Teskey said will ultimately drive transactions and pull capital back into the office sector.
In New York, the nation’s largest office market, scarcity of top‑tier space has already pushed trophy rents above $320 per square foot in recent deals. Brookfield’s Manhattan West office complex, just east of Hudson Yards, ranks among the properties attracting tenants willing to pay well above $100 per square foot, according to brokerage studies.
Last quarter, Brookfield spent about $3 billion acquiring a portfolio of U.S. senior housing properties, a prime office asset in Tokyo and a mixed‑use portfolio in Paris.
Teskey acknowledged that “geopolitical uncertainty remains elevated” as investors weigh trade tensions and volatility in the energy market, but said those risks are likely “temporary and manageable.”
AI seen as a tailwind
On artificial intelligence, Teskey said concerns about disruption are “equally balanced by accelerating AI adoption.”
“That is not a headwind for Brookfield, it is a very significant tailwind,” he said. AI infrastructure “is undoubtedly the largest and fastest‑growing theme across our broader business.”
With AI requiring “enormous physical infrastructure, data centers, power generation, transmission, fiber, computing, cooling systems, and industrial capacity across the supply chain,” Brookfield is positioned to benefit through its investments across those areas, including “leadership positions in data centers and renewable power,” he said.
“We can combine real estate infrastructure and energy into integrated solutions at scale,” Teskey said. “Increasingly, that is exactly what the largest hyperscalers, governments, and enterprise customers are looking for.”
Blackstone, the world’s largest commercial property owner, has made similar arguments in recent months, pushing back against investor concerns tied to private credit and AI‑driven disruption as it continues to expand its bet on AI‑related infrastructure.
Teskey said Brookfield has “limited exposure” to areas such as software and private‑wealth credit, where investor concerns are currently most acute.
Brookfield is already in talks to expand — “by multiples” and “not by percentages” — its $5 billion partnership announced in October with Bloom Energy to power large AI data centers using on‑site fuel cells rather than relying on the electric grid, Teskey said.
“In this environment, real assets win,” he said. “When there is uncertainty around growth, rates, or the durability of earnings, investors move toward high‑quality, cash‑generative assets and essential service businesses.”
Brookfield has “an incredibly positive outlook for 2026,” Teskey said, predicting a “significant” record year for fundraising, and not just “by a little bit.”
Brookfield raised $21 billion in the first quarter, including $13.4 billion for its credit business and $3.4 billion for infrastructure funds. Its real estate arm raised $1.3 billion. First‑quarter distributable earnings rose 7% to $702 million.