Industry Update: Takeaways from IBS / KBIS 2026

As we move through the busiest part of the 2026 trade show schedule, we wanted to provide key observations from the 2026 edition of the NAHB International Builders' Show (“IBS”) and the Kitchen & Bath Industry Show (“KBIS”), held in Orlando, FL.

As IBS / KBIS bids farewell to Orlando and transitions toward a more permanent home in Las Vegas, this year’s show was well attended – albeit slightly down from 2025. The energy on the floor reflected an industry eager to move beyond the volatility of the past several years and increasingly focused on positioning for 2026 and beyond.

Given the scale and diversity of exhibitors and attendees at IBS / KBIS, we had the opportunity to spend time meeting with owners and operators across the entire building products landscape, including tile & stone, countertops, cabinets, flooring, kitchen and bath fixtures, and other adjacent segments serving both commercial and residential end markets. Conversations spanned manufacturers, distributors, fabricators, and installers.

Specifically, we had the opportunity to catch up with several active acquirors including Allied Building Products (a portfolio company of Astara Capital Partners), Architectural Surfaces Group (a portfolio company of Sun Capital Partners), Cambria, Kingston Kitchen & Bath (a portfolio company of LongueVue Capital), and Sims-Lohman.

Market Tone and Operating Environment

Our biggest takeaway from IBS/KBIS was a more optimistic tone for 2026; however, we did sense that owners and operators are approaching that optimism with measured caution – encouraged by improving macro indicators, yet mindful of the volatility experienced over the past several years and the need for sustained stability before fully leaning into significant expansion plans.

Across product categories, operators consistently cited several primary drivers supporting a more constructive outlook:

• A more stable and predictable supply chain and tariff environment

−      After several years of disruption, companies noted meaningful improvement in inventory visibility, lead times, freight reliability, and supplier coordination. While geopolitical risk and trade policy remain areas to monitor, the day-to-day operating environment feels less reactive and more manageable. Greater clarity around tariff exposure and sourcing strategies has allowed operators to plan purchasing, pricing, and margin management with increased confidence.

• Lowering interest rates driving commercial and residential construction /  building products demand

−      The downward trend in interest rates has begun to positively influence sentiment across both residential and commercial channels. While not yet a full catalyst for a broad-based housing recovery, lower borrowing costs are improving project underwriting, stimulating refinance and move-up activity, and supporting developers’ willingness to move projects forward. On the commercial side, improved financing conditions are enhancing feasibility for select projects, particularly in growth markets across the Southeast and broader Sun Belt.

• An increased industry-wide focus on affordability to support housing demand

−      Affordability has become a central theme across manufacturers and distributors. Operators are actively engineering product lines to hit sharper price points without compromising design appeal or durability. This includes introducing value-tier SKUs, optimizing material inputs, and streamlining logistics and installation processes. Many participants emphasized that aligning product offerings with attainable price points—while still meeting evolving consumer preferences—will be critical to unlocking incremental demand and supporting sustained housing activity in 2026 and beyond.

While residential markets remain constrained in the near term, 30-year mortgage rates have continued to trend downward, recently reaching below 6% for the first time since 2022. While that level alone may not fully unlock single-family housing activity, many believe it may be sufficient to spur more normalized transaction volumes and housing starts.

Importantly, operators have now closed the books on a turbulent 2025 and have had the opportunity to evaluate performance from a 30,000-foot perspective. Two themes continue to stand out:

1. Commercial end markets have remained a relative bright spot, providing stability for diversified operators – particularly for those catering to commercial segments that have performed over the last 12-18 months (i.e. offices, hotels/hospitality, healthcare)

   
   

2. Boutique and specialized products targeting the high-end of the market have continued to outperform, as affluent consumers and design-driven projects remain comparatively resilient

These dynamics mirror what we observed in prior updates: while broad-based residential recovery has been uneven, select segments of the market have remained healthy and profitable.

M&A Sentiment and Strategic Priorities

Strategic and financial buyers remain highly engaged.

Geographic Focus

Discussions with active acquirors continue to center on attractive, high-growth geographies – particularly the Southeast and broader Sun Belt. The Carolinas were a recurring theme in our conversations, with many buyers noting several years of robust population and housing growth that are expected to persist in the short- and medium-term. An overwhelming number of acquirors remain interested in expanding their footprint in these markets.

Expansion into Adjacent Categories

Another consistent theme we have heard – especially among strategic buyers – is the desire to expand into adjacent product categories to create a more comprehensive customer offering.

Given our focus in tile and stone, the most common examples include:

• Tile & stone distributors looking to expand into countertop fabrication and cabinets manufacturing / distribution (some acquirors have formed a thesis around owning the installation as well)

• Stone and countertop fabricators evaluating cabinet or fixture distribution

• Broader building products distributors seeking to assemble a more complete “one-stop-shop” offering near the end of the build cycle

Creating a single-source solution for products that are near or at the final stages of the construction process has become a recurring strategic priority. Buyers increasingly view category adjacency as a way to increase share of wallet, deepen customer relationships, and enhance margin durability.

Private Equity Dynamics

On the private equity side, conversations were equally constructive.

Over the past 18–24 months, private equity sponsors have seen a noticeable decline in the number of high-quality middle-market platform businesses coming to market, making capital deployment more difficult. Concurrently, a meaningful portion of scaled portfolio companies are approaching the later phases of their investment cycles, heightening pressure to pursue exits and return capital to investors.

As interest rates decline and performance expectations improve heading into 2026, we believe conditions may align to create a more favorable exit environment. Improved macro stability combined with renewed buyer confidence could drive an increase in both sponsor-to-sponsor transactions and strategic exits.

Outlook

While near-term residential headwinds persist, the conversations at IBS/KBIS reinforce our view that the building products sector is moving off cyclical lows and laying the groundwork for the next phase of growth.

Stabilizing macro conditions, disciplined operators, geographic tailwinds in the Southeast and Sun Belt, and sustained buyer appetite – particularly for scaled, well-positioned businesses – further supports our thesis that transaction activity could accelerate meaningfully as 2026 unfolds.

TwinShore Advisors remains deeply engaged across the building products ecosystem. We are actively advising founders, family-owned businesses, and management teams on growth strategies, acquisition opportunities, and long-term exit planning.

To further discuss these trends or to explore strategic alternatives, please reach out to Chobun Hieblinger (chieblinger@twinshoreadvisors.com) or Wade Bennett (wbennett@twinshoreadvisors.com).

We welcome the opportunity to connect.