CRE This Week - What's impacting the United States market?
February 23, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of February 23, 2026
Welcome to the latest edition of CRE This Week, curated by Altus Group’s US research team.
Our team has handpicked pertinent and noteworthy market indicators, articles, original research, and significant industry dates that are critical to the US commercial real estate sector. We understand that your time is valuable, so we're excited to deliver research that helps you stay informed and saves you some time each Monday morning.
For more key economic indicators that matter to commercial real estate, see Top Indicators by Major Asset Type.
Economic print
Macro economic factors impacting CRE
Building Permits, Housing Starts, and the Housing Market Index
The Census Bureau and HUD released delayed December 2025 residential construction data on February 18. Total housing starts came in at a SAAR of 1.404 million, up 6.2% from November but down 7.3% year over year. Single-family starts rose 4.1% to 981,000; multifamily starts hit 402,000. Total permits increased 4.3% to 1.448 million, still 2.2% below year-ago levels. For full-year 2025, total starts were 1.36 million, down 0.6% from 2024, with single-family starts off 6.9% and multifamily up 17.4%. Total 2025 permits fell 3.6% to 1.425 million.
Separately, the NAHB HMI (released February 17) slipped one point to 36, below the consensus estimate of 38 and the 22nd straight month below the breakeven of 50. Sales expectations fell three points to 46, and 36% of builders reported cutting prices.
The monthly bounce in starts and permits does not change the broader story: single-family production is contracting, and builder sentiment confirms it. Elevated mortgage rates, high construction costs, and compressed margins are keeping builders cautious and buyers sidelined. For CRE, this reinforces rental demand, particularly where the homeownership gap is widest. On the multifamily side, total units under construction fell to 1.3 million in December, down 10.5% year over year, and NAHB expects multifamily starts to decline roughly 5% in 2026. That pipeline contraction could support apartment fundamentals by 2027 to 2028.
The Census Bureau's Advance Economic Indicators Report, released February 19, showed retail inventories were essentially flat in December at $812.5 billion, up 0.8% year over year. Wholesale inventories edged up 0.2% to $917.2 billion, rising 2.8% from December 2024. The November wholesale revision was unchanged. Neither readings were adjusted for price changes. The report also included the advance goods trade deficit, which widened to $98.5 billion in December from $82.8 billion in November, driven by a $10.2 billion increase in goods imports and a $5.6 billion decline in exports.
The inventory data are modest but relevant for CRE. Flat retail inventories suggest retailers are managing stock cautiously heading into 2026, which limits demand for incremental warehouse and distribution space in the near term. The 2.8% year-over-year rise in wholesale inventories is more notable and points to a gradual restocking cycle that could support industrial and logistics leasing activity, particularly for bulk distribution facilities. The widening trade deficit, driven largely by a surge in industrial supplies imports, could translate into increased port and warehouse throughput in Q1. These inventory figures also feed directly into the BEA's advance Q4 GDP estimate, where inventory changes will be a key swing factor for the headline print.
The U.S. Census Bureau and the Department of Housing and Urban Development released new home sales data for November and December, and simultaneously on February 20, after delays tied to the federal funding lapse. New single-family home sales fell 1.7% in December to a seasonally adjusted annual rate of 745,000 units, down from 758,000 in November but 3.8% above the year-ago pace. For the full year 2025, an estimated 679,000 new homes were sold, down 1.1% from 686,000 in 2024. The median sales price rose 4.2% month over month to $414,400 but was 2.0% below December 2024 levels, consistent with the builder pricing concessions that defined much of the year. Inventory fell to 472,000 units, representing 7.6 months of supply, down from 7.7 in November and 8.2 a year ago.
Near-flat full-year new home sales confirm that mortgage rates near 6% continue to cap purchase activity, and median prices falling 2.0% year over year in December suggest builders are leaning harder on concessions and rate buydowns to move inventory. That pricing pressure is worth watching for multifamily owners, as incentivized entry-level new homes compete directly with Class B apartments and BTR communities for the same cost-sensitive household. More broadly, until rates move meaningfully below 6%, new home sales are likely to stay range-bound, keeping transaction-driven consumer spending on furnishings and home improvement subdued.
Personal Income & Outlays and the PCE Price Index
The Bureau of Economic Analysis released the Personal Income and Outlays report for December on February 20, 2026, delayed due to the fall government shutdown. The headline PCE price index rose 0.4% month over month and 2.9% year over year. Core PCE also increased 0.4% monthly, above the 0.3% consensus, and accelerated to 3.0% year over year, up from 0.2% monthly readings in October and November. Real PCE gained just 0.1%, and the personal saving rate slipped to 3.6%.
The hot core print complicates the Fed's rate path. At 3.0% year over year, core PCE sits well above both the 2.0% target and the Fed's December SEP projection of 2.5% for year-end 2026, giving the FOMC little room to cut from the current 3.50% to 3.75% range. Treasury yields moved higher on the release, and futures repriced even lower odds of a near-term cut, a signal that CRE borrowing costs are unlikely to fall meaningfully in the near-term. Sticky services inflation continues to reinforce elevated shelter costs, while the low (3.6%) savings rate and flat real spending point to a stretched consumer that could weigh on hospitality and retail demand.
The University of Michigan's final consumer sentiment index for February came in at 56.6, revised down from the preliminary 57.3 and barely above January's 56.4. Current conditions were revised lower to 56.6 from 58.3, while expectations held at 56.6. Year-ahead inflation expectations fell to 3.4% from the preliminary 3.5%, and five-year expectations ticked down to 3.3% from 3.4%, though both remain above the pre-pandemic 2.3% to 3.0% range. About 46% of consumers cited high prices eroding their finances, and gains were concentrated among wealthier consumers, while lower-income households saw no improvement. A special chart in the release showed that year-ahead inflation expectations for tariff-mentioners and non-mentioners have now converged after diverging for months, suggesting tariff-related price fears have been broadly absorbed.
The revision lower reinforces that consumer confidence remains stuck near historically depressed levels, with no meaningful improvement across the broader population. The K-shaped split is the key signal for CRE: wealthier consumers continue to support luxury retail, Class A multifamily, and experiential hospitality, but persistent weakness among lower-income households points to continued pressure on value-oriented retail tenants and consumer-facing sectors reliant on broad-based spending. If the decline in inflation expectations proves accurate and feeds through to actual pricing, that would be a positive for borrowing costs and the rate outlook. But for now, sentiment this low continues to weigh against any near-term acceleration in leasing activity or discretionary capital deployment.
Q4 2025 GDP (Advance Estimate)
The Bureau of Economic Analysis released its advance estimate for Real GDP for Q4 2025 and full year 2025 on February 20. GDP grew at a 1.4% annualized rate during the quarter, well below the 3.0% consensus and a sharp deceleration from 4.4% in Q3. Consumer spending slowed to 2.4% from 3.5%, with goods spending turning slightly negative while services held up. Government spending declined, with the BEA estimating that the federal shutdown subtracted roughly 1.0 percentage point from headline growth. Exports fell 0.9% after surging 9.6% in Q3. Investment was the bright spot, led by intellectual property products, inventory rebuilding, and information processing equipment, consistent with ongoing AI-related capital spending. Real final sales to private domestic purchasers grew 2.4%, a better read on underlying momentum. The Gross Domestic Purchases Price Index accelerated to 3.7% from 3.4%. For full year 2025, real GDP grew 2.2%, down from 2.8% in 2024.
The headline miss looks worse than the underlying economy. Strip out the shutdown drag and trade volatility, and private demand is still growing at a pace consistent with moderate job growth and stable tenant demand. But the deceleration comes at a difficult moment. The Fed is holding at 3.50% to 3.75%, and with broad price pressures still elevated, there is little room to ease. Futures markets price roughly a 94% chance of no move in March, with June as the earliest likely cut. For CRE, borrowing costs may stay elevated, transaction volume remains below pre-pandemic averages, and cap rate compression may be limited. The silver lining is on the supply side: high rates, tariff-driven construction cost increases, and tighter construction lending are curbing new starts across most property types. Less new supply should help support occupancy and rent growth over the next 12 to 18 months, particularly in industrial and multifamily.
News
News to know
Return-to-office trend maintains momentum | Commercial Property Executive, February 16, 2026
Return to office momentum continued in January despite winter storms, with nationwide office visits just 38.3 percent below January 2019 levels and 1.5 percent higher than January 2025, according to Placer.ai. While storm-impacted markets like Dallas and Boston saw year-over-year declines, most tracked cities posted gains, led by San Francisco and Los Angeles. January marked the strongest return-to-office performance since the pandemic, on a per-working-day basis, reflecting sustained corporate mandates, though hybrid flexibility remains in place.
U.S. capital markets are seeing a massive surge in liquidity, with real estate fundraising up 29% in 2025 to $222.2 billion. Private credit has grown into a $1.7 trillion industry, stepped in to fill the void left by regional banks. However, this abundance of capital has triggered a "race to the bottom," characterized by loosened underwriting standards, compressed credit spreads, and "tourist" lenders with little experience in down-cycles. While deal volume rose 23% to $545.3 billion in 2025, it still trails the peak levels of 2021-2022, leading to intense competition for a limited number of high-quality deals.
Lenders to commercial real estate owners: Pay up now | Wall Street Journal, February 17, 2026
The "extend and pretend" era is ending as lenders reach a breaking point with troubled loans. The delinquency rate for office buildings in CMBS hit a record 12.34% in January, the highest since tracking began in 2000. Creditors are increasingly convinced that structural shifts like hybrid work have permanently devalued office space. Approximately $100 billion in securitized loans mature this year, with more than half unlikely to repay. While industrial and grocery-anchored retail remain resilient, "zombie" office buildings are increasingly headed toward foreclosure, weighing heavily on downtown areas like Portland and St. Louis.
The office market Is as K-shaped as the US economy | Bloomberg, February 17, 2026
The office market is undergoing a "K-shaped" recovery, where the highest-end "trophy" buildings in select cities like New York and Dallas are shifting toward expansion while older properties continue to struggle. Developers are selectively breaking ground on new luxury towers, betting on an acute shortage of top-tier space by 2028-2030. Despite high financing costs, demand for "shiny and new" space remains robust, with some projects half-leased years before completion. However, uncertainty regarding the impact of AI on white-collar employment looms, potentially threatening the long-term viability of these new projects when they finally open.
NYC mayor threatens property tax hike as last resort option | Bloomberg, February 17, 2026
New York City Mayor Zohran Mamdani released a $127 billion budget proposal and threatened a nearly 10% property tax increase to pressure Governor Kathy Hochul for additional state funding. The hike would affect more than 3 million residences and over 100,000 commercial units, but requires City Council approval, and leadership has already signaled opposition. Mamdani cited a roughly $5 billion budget gap from prior underbudgeting and framed the increase as a last resort beyond the $1.5 billion Hochul has committed. Piper Sandler's Alexander Goldfarb noted some tax increase is likely but the key is finding a structure that raises revenue without driving taxpayers out. The city's budget has grown 55% over the past decade, from $82.1 billion in 2017 to $127 billion today.
Saks Global bankruptcy casts shadow over retail landscape | GlobeSt, February 19, 2026
Saks Global, parent of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, filed for bankruptcy last month following its $2.65 billion acquisition of Neiman Marcus and Bergdorf Goodman. The company operates roughly 125 stores across 13 million square feet, including marquee locations on Manhattan's Fifth Avenue and in Beverly Hills. Landlords of luxury malls face particular exposure, as Saks has long served as a high-end anchor tenant that is difficult to replace with comparable brands. Moody's noted that retail sector defaults remain elevated, with J. Crew, Torrid, Guitar Center, and QVC Group among those on credit watch lists. Fitch flagged the limited alternatives for luxury vendors, noting that Saks and Neiman's have historically been critical distribution channels with few equivalent substitutes outside of Nordstrom and Bloomingdale's.
US equity REITs raised $2.30 billion in January, all through debt offerings, up 7.7% from December but down roughly 42% year over year. Communications REIT Uniti Group led with $1.00 billion in senior notes due 2032, with proceeds directed toward repaying existing term loan borrowings. Simon Property Group raised $800 million via 4.300% notes due 2031 to refinance maturing 2026 debt, and Vornado Realty Trust issued $500 million in 5.750% notes due 2033, also earmarked for near-term debt paydowns. By sector, specialty led at $1.00 billion, followed by retail at $800 million and office at $500 million. The activity reflects continued REIT reliance on debt markets for refinancing rather than new equity issuance.
The White House sent a memo to congressional leaders proposing a ban on investors owning more than 100 single-family homes from purchasing additional properties. The threshold is lower than the 1,000-unit mark many midsize investors had expected, potentially affecting hundreds of firms. The proposal includes exemptions for investors who build or heavily renovate homes for rental purposes and gives the Treasury secretary authority to modify the criteria. The administration is pushing to attach the ban as an amendment to housing legislation moving through Congress, and Trump is expected to address it at the State of the Union on Tuesday. Housing economists remain skeptical that the ban would meaningfully improve affordability, as institutional investors own a small share of the overall housing stock, though concentrations in markets like Atlanta and Phoenix have drawn scrutiny.
Supreme Court rules against Trump in tariff case | Bisnow, February 20, 2026
The Supreme Court ruled 6-3 that President Trump's use of IEEPA to impose tariffs is unlawful, nullifying a central piece of his trade policy. The ruling covers roughly $133B in collected duties, though the court left open whether refunds are required. Tariffs enacted under other authorities remain in effect, including a 50% rate on steel, aluminum and copper and 10% to 25% on lumber. The administration is expected to pivot to national security statutes to maintain trade restrictions on targeted sectors. For CRE, the decision could relieve pressure on construction input costs and reduce supply chain uncertainty, supporting more stable capital planning across industrial, retail, and development activity.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | What the latest lending data tells us about CRE financing
Financing conditions have improved for US CRE borrowers.
Fed data shows easing standards and rising borrower demand. Our Debt Capital Markets Survey shows tighter spreads and increased quote activity. Bank and asset manager earnings calls referenced renewed engagement across property types, including office.
In this episode of CRE Exchange, we walk through the data and how it is showing up across capital markets.
Our research team weighs in | CRE job market rebound
Our own Cole Perry, Associate Director of Research at Altus Group, shared his perspective with Bisnow on why commercial real estate firms are increasing hiring as deal activity picks up.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, February 23
10:00AM: Factory Orders (Dec.)
Tuesday, February 24
9:00AM: S&P Case-Shiller Home Price Index (Dec.)
10:00AM: Wholesale Inventories (Dec.)
10:00AM: Consumer Confidence (Feb.)
Friday, February 27
8:30AM: Producer Price Index (Jan.)
9:45AM: Chicago Business Barometer/PMI
10:00AM: Construction Spending (Dec.)
Upcoming industry events
February 25-28: CORFAC Spring Conference (New Orleans, LA)
Upcoming Earnings Calls (Times in EST)
Monday, February 23, 2026
11:00 AM: Easterly Government Properties, Inc. [NYSE:DEA]
Tuesday, February 24, 2026
10:00 AM: Ryman Hospitality Properties, Inc. [NYSE:RHP]
10:00 AM: Diversified Healthcare Trust [NASDAQ:DHC]
11:00 AM: Apple Hospitality REIT, Inc. [NYSE:APLE]
11:00 AM: NexPoint Residential Trust, Inc. [NYSE:NXRT]
1:00 PM: Xenia Hotels & Resorts, Inc. [NYSE:XHR]
5:00 PM: Realty Income Corporation [NYSE:O]
Wednesday, February 25, 2026
8:00 AM: Lineage, Inc. [NASDAQ:LINE]
8:30 AM: Tanger Inc. [NYSE:SKT]
8:30 AM: Gladstone Land Corporation [NASDAQ:LAND]
8:30 AM: Veris Residential, Inc. [NYSE:VRE]
10:30 AM: Chatham Lodging Trust [NYSE:CLDT]
11:00 AM: FrontView REIT, Inc. [NYSE:FVR]
11:00 AM: LTC Properties, Inc. [NYSE:LTC]
11:00 AM: Sila Realty Trust, Inc. [NYSE:SILA]
4:30 PM: OUTFRONT Media Inc. [NYSE:OUT]
Thursday, February 26, 2026
8:30 AM: EPR Properties [NYSE:EPR]
8:30 AM: Whitestone REIT [NYSE:WSR]
9:00 AM: Pebblebrook Hotel Trust [NYSE:PEB]
10:00 AM: VICI Properties Inc. [NYSE:VICI]
10:00 AM: Summit Hotel Properties, Inc. [NYSE:INN]
10:00 AM: Service Properties Trust [NASDAQ:SVC]
10:00 AM: Millrose Properties, Inc. [NYSE:MRP]
11:00 AM: Ashford Hospitality Trust, Inc. [NYSE:AHT]
11:00 AM: Global Net Lease, Inc. [NYSE:GNL]
12:00 PM: Hudson Pacific Properties, Inc. [NYSE:HPP]
12:00 PM: SmartStop Self Storage REIT, Inc. [NYSE:SMA]
1:00 PM: National Storage Affiliates Trust [NYSE:NSA]
Friday, February 27, 2026
9:00 AM: DiamondRock Hospitality Company [NASDAQ:DRH]
10:00 AM: RLJ Lodging Trust [NYSE:RLJ]
10:00 AM: National Health Investors, Inc. [NYSE:NHI]
11:00 AM: Braemar Hotels & Resorts Inc. [NYSE:BHR]
11:00 AM: CubeSmart [NYSE:CUBE]
12:00 PM: Sunstone Hotel Investors, Inc. [NYSE:SHO]
1:00 PM: American Healthcare REIT, Inc. [NYSE:AHR]
About our research team
Omar Eltorai
Senior Director of Research
Altus Group
Omar Eltorai is a Research Director at Altus Group. With more than a decade of experience in the industry in investment management and financing roles,
Omar's focus is on macro, capital and market trends affecting the US CRE market. Beyond regularly authoring articles and reports, his commentary and analysis has been featured in various media publications, including: Wall Street Journal, Globe Street, and Yahoo! Finance.
Cole Perry
Associate Director of Research
Altus Group
Cole Perry is a Associate Director of Research with Altus Group's Research team. In this role, Cole delivers key insights into macroeconomics, capital markets, and the broader commercial real estate sector.
Cole boasts a rich background in Commercial Real Estate analytics with previous roles at CompStak and Brixmor Property Group. He holds dual M.S. degrees from Columbia University in Urban Planning and Real Estate Development.
Disclaimer: The opinions expressed in this newsletter are solely those of the authors and are not endorsed by Altus Group Limited, its affiliates and its related entities (collectively “Altus Group”). This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice or services of Altus Group. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy, completeness or reliability of the information contained in this publication, or the suitability of the information for a particular purpose. To the extent permitted by law, Altus Group does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. The distribution of this publication to you does not create, extend or revive a client relationship between Altus Group and you or any other person or entity. This publication, or any part thereof, may not be reproduced or distributed in any form for any purpose without the express written consent of Altus Group.
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