U.S. commercial real estate industry participants have faced a market rife with uncertainty or instability for the last six years. Mounting debt maturities, portfolio distress, tightening credit standards and loan negotiation terms, waves of loan sales, and pressure from AI are weighing on the industry. 

Market fatigue was a central element of Keller Augusta's 2026 Workplace & Compensation Survey. Hiring managers and employees alike feel that prolonged instability has taken a toll, and now, upward pressure on interest rates has muddied near- and medium-term market outlooks. As a firm, we have seen the fatigue, or outright burnout, set in on existing workers and job seekers who have regularly dealt with portfolio management or persistent distressed scenarios, so respondents were asked to opine about their firm's posture in the market and how the last several years have shaped their personal perspectives.

Our findings suggest many firms may not know how to take meaningful action to address the fatigue, maybe thinking the only way out is through. Firms willing to invest in their culture and organizational infrastructure, whether through useful and attractive office spaces, quality leadership, or rethinking their people management methods, may be better positioned to improve morale and performance as well as retain and attract the specialized talent the market demands.

Market fatigue is widely felt, but morale is proving durable

The survey findings show fatigue from market instability is palpable. Nearly 60% of senior- or executive-level professionals and hiring managers said they either agreed or strongly agreed that the CRE market environment over the last 12 to 24 months has created employee fatigue and negatively affected company morale. About 58% of rank-and-file employees below executive level who don't engage in hiring decisions reported similar views. 

The alignment is notable: fatigue is being felt and recognized at every level as professionals manage portfolios and investment timelines, unravel distressed scenarios, or chase new opportunities amid uncertainty. Recent lackluster growth in compensation and benefits could also be adding to issues with morale, per findings from this year’s Keller Augusta survey.

Still, just over 70% of rank-and-file employees feel general morale among employees at their respective firms was either average, good, or excellent; 36% reported it was good or excellent. 

There are a variety of tactics firms can implement to try to mitigate the erosion of morale or productivity, including optimizing offices, improving management techniques, and fostering a culture predicated on psychological safety (allowing room for more recognition, dissent, error, and subsequent course correction). Higher-performing teams report more errors, not fewer, because employees aren’t scared to fail and are allowed to learn and grow from failures.

Workspace investments aren’t a priority for many firms, but can offer an overlooked opportunity

Despite widespread acknowledgment that morale has suffered due to market conditions, firms are not broadly responding with physical office environments. Seventy-five percent (75%) of senior-level decision-makers said their firm wasn’t planning office upgrades or physical workplace improvements, such as amenities, perks, or renovations, in 2026 to support or improve company morale. Rank-and-file employees reported an even starker picture: More than 81% of respondents said their respective firm had no such upgrades planned.

The numbers suggest a disconnect between the awareness of lowering morale and what’s driving it and the resources being deployed to address it. That combination raises questions about retention and recruitment risk at a time when, as Keller Augusta's broader 2026 survey findings show, firms are still heavily competing for specialized talent in asset and portfolio management, acquisitions, originations, and fundraising, among others. 

Most of all our respondents (65%) said they are required to be in the office either four or five days per week, but 64% said their organization has a hybrid or remote work policy that provides additional flexibility (i.e. summer Fridays, remote work on holidays, extended periods of remote-only work on request, etc.). 

Since two-thirds of CRE professionals are in the office, physical improvements can be a directly effective tool in helping firms improve morale and productivity to cut through the effect of market instability. There are many possibilities which resonate with workers such as biophilic features or mixed layouts for focused work, collaboration, and informal interaction. Workplaces should be viewed as infrastructure for retention, especially as AI use grows (AI “power users” spend less time working alone, and more time learning and socializing).

Leadership and employee benefits could be tools for solving workforce fatigue

Our findings show that employee benefits weren’t meaningfully supported or enhanced for 2026, which could be contributing to the negative patterns of fatigue and morale. Around 85% of senior-level decision-makers said their firm wasn’t planning to enhance employee benefits — items such as medical coverage, 401(k) contributions, more free lunches, mid-career training, or continuing education — in 2026 to support or improve culture and morale.

Eighty-eight percent (88%) of rank-and-file respondents said their firm had no benefits enhancements planned for the year. 

Additionally, this is compounded by all respondents identifying market or sector challenges (38%), compensation restrictions (34%), company access to capital (32%), and heavy workloads (30%) as their leading workplace concerns. These were followed by feeling unappreciated or there being a lack of recognition (28%) or no room for growth (25%), and a lack of confidence in company leadership (22%).

Firms could address these concerns through enhancing incentive structures, introducing proactive team building, or improving manager quality and engagement. Manager and employee engagement are correlated; lower manager engagement hurts employee engagement, which can crater productivity and heavily influence employee satisfaction.

Keller Augusta's 2026 Workplace & Compensation Survey was conducted over the course of nearly three weeks in March, drawing responses from employers, employees, and candidates across commercial real estate. Contact kaitlin@kelleraugusta.com to learn more about the full compensation benchmarking and market trends study.

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