CRE This Week - What's impacting the United States market?
May 18, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of May 18, 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
The National Association of Realtors reported on May 11 that existing-home sales rose 0.2% in April to a seasonally adjusted annual rate of 4.02 million, unchanged from a year ago. Sales gained in the Midwest and South but declined in the West. The median existing-home price increased 0.9% year-over-year to $417,700, marking the 34th consecutive month of annual price gains. Inventory rose 5.8% from March to 1.47 million units, equal to 4.4 months of supply. The average 30-year fixed mortgage rate was 6.33% in April, up from 6.18% in March but down from 6.73% a year earlier. NAR noted that days on market lengthened to 32 from 29 a year ago, suggesting buyers are moving more cautiously.
The flat sales pace at roughly 4 million units keeps transaction-driven consumer spending on furnishings and home improvement subdued, and does little to accelerate brokerage and mortgage origination activity. The modest inventory build is a marginal positive for affordability but supply remains tight at 4.4 months, sustaining conditions that keep many would-be buyers renting. For multifamily, extended renter tenure and a still-elevated cost of homeownership relative to renting continue to support occupancy. The 40-basis-point rise in mortgage rates from March to April is a near-term headwind for contract activity and will likely show up in pending sales data over the next one to two months.
The Bureau of Labor Statistics released the April 2026 Consumer Price Index (CPI) on May 12. Headline CPI rose 0.6 percent month over month on a seasonally adjusted basis, with the annual rate accelerating to 3.8 percent from 3.3 percent in March. Energy drove the bulk of the monthly gain, up 3.8 percent on the month and 17.9 percent annually, with gasoline up 28.4 percent over the year. Core CPI rose 0.4 percent month over month and 2.8 percent year over year, up from 2.6 percent in March. Shelter increased 0.6 percent on the month, with both OER and rent of primary residence each up 0.5 percent. Airline fares rose 2.8 percent in April and are up 20.7 percent annually. New vehicles and medical care each declined on the month.
The headline re-acceleration to 3.8 percent will push Fed cut expectations deeper into the second half of 2026, and the CME FedWatch tool is now pricing a meaningful probability of a rate hike before year end. The print is complicated by the sources of inflation: energy up 17.9 percent annually and tariff-driven goods pressure showing up in categories like apparel, up 4.2 percent over the year, are doing much of the work rather than broad-based demand. Core re-accelerating to 2.8 percent and shelter holding at 3.3 percent year over year are harder to dismiss, though OER and rent each printing 0.5 percent on the month looks inconsistent with private market data, which continues to show flat to modestly negative effective rent growth across many markets. Because CPI shelter is measured with a significant lag, the re-acceleration likely reflects leasing conditions from 12 or more months ago, and if private data proves the better leading indicator, shelter disinflation could still pull core lower later in the year. In the near term, the 10-year Treasury moved higher on the release, which, if sustained, would add cap rate pressure, widen bid-ask spreads, and extend refinancing risk for floating-rate borrowers approaching maturity.
NFIB Small Business Optimism Index
The National Federation of Independent Business released its Small Business Economic Trends report for April 2026 on May 13. The headline Optimism Index edged up 0.1 points to 95.9, remaining below its 52-year average of 98.0. Forward-looking indicators weakened: expected business conditions fell 7 points to a net 4%, the lowest since October 2024, expansion intentions dropped to 7%, actual sales came in at a net -8%, and capital expenditure activity fell to 51% of owners, down 9 points since January. Price pressures re-accelerated, with the net share raising prices jumping 5 points to 30%, nearly double the long-run average of 13%. Labor quality remained the top concern at 18% of respondents, and the average short-term borrowing rate rose to 8.3% on market moves rather than Fed action.
Small business tenants are pulling back on space commitments, investment, and hiring simultaneously, limiting near-term leasing demand across retail, office, and light industrial. The continued drop in capital spending is a direct headwind for owner-user and small-bay flex demand. Re-accelerating price plans signal margin pressure that could raise credit risk in neighborhood retail and service-oriented formats, while independently tightening credit conditions leave smaller tenants with fewer options heading into the second half of 2026.
The Bureau of Labor Statistics released the Producer Price Index for April 2026 on May 13. Final demand prices rose 1.4 percent month-over-month, the largest monthly gain since March 2022, and are up 6.0 percent year-over-year, the highest 12-month reading since December 2022. Services prices drove roughly 60 percent of the monthly increase, up 1.2 percent, led by a 2.7 percent jump in trade services margins. Final demand goods rose 2.0 percent, with energy up 7.8 percent and gasoline surging 15.6 percent. Core PPI (ex-food, energy, and trade services) increased 0.6 percent on the month and 4.4 percent year-over-year, the largest 12-month advance since February 2023. Truck freight costs rose 8.1 percent within intermediate demand services, a notable signal for logistics pricing.
The key question is how much of this feeds through to consumer prices and on what timeline. PPI leads CPI with a lag of roughly one to three months, and with core PPI at 4.4 percent annually, the path back to the Fed's 2 percent inflation target looks increasingly difficult. Energy-driven goods inflation can be volatile and may partially reverse, but the breadth of the April increase, spanning services margins, trade, and transportation, suggests this is not purely an energy story. For CRE, a sustained rebound in producer prices would keep construction input costs elevated, reinforcing the supply constraint that has supported fundamentals across industrial and multifamily. On the capital markets side, a hot PPI print with uncertain CPI transmission reduces the case for near-term rate cuts, keeping Treasury yields biased higher and limiting cap rate compression heading into the second half of 2026.
The U.S. Census Bureau released its advance estimate of retail and food services sales for April 2026 on May 14. Total sales came in at $757.1 billion, up 0.5% from March and 4.9% above April 2025 levels. Retail trade sales rose 0.5% on the month and 5.2% year over year. Nonstore retailers, primarily e-commerce, led category gains at 11.1% above last April, while food services and drinking places grew 2.7% annually. The February-to-April period was up 4.4% from the same stretch in 2025. March was revised slightly lower, from +1.7% to +1.6%. These figures are not adjusted for inflation, so real spending growth was softer than the headline implies.
The 0.5% monthly gain and near-5% annual increase suggest the consumer held up reasonably well in April, though the inflation caveat matters. With core PCE still running above the Fed's 2% target, real retail growth is likely closer to flat to modestly positive, which limits the read-through to CRE fundamentals. The continued outperformance of nonstore retailers reinforces last-mile and infill industrial demand while putting pressure on discretionary brick-and-mortar tenants competing with e-commerce. Food services growth of 2.7% is softer than recent quarters and bears watching as a signal for restaurant and experiential retail tenants.
News
News to know
News to know
How global investors are adjusting to disruption | Commercial Property Executive, May 11, 2026
Cross-border CRE investment is holding up despite compounding macro shocks, including the U.S.-Iran conflict, renewed inflation, and elevated interest rates. Global cross-border transaction volume grew 12 percent in 2025, the first year-over-year increase since 2021, per Cushman & Wakefield, but downside risk awareness is rising heading into 2026. Institutional investors are responding by prioritizing cash-flow durability, supply-constrained markets, and assets with strong demographic and employment demand drivers. In a notable example of repriced U.S. office attracting foreign capital, Cyprus-based Yoda Group paid $678.3 million for Transamerica Pyramid Center in San Francisco in early April, well below the prior owner's all-in basis of roughly $1.05 billion. The U.S. data center sector continues to draw global capital on AI infrastructure demand, with SoftBank-backed SB Energy paying $285 million for a 1.1 million-square-foot former 3M campus in Austin. MSCI's Jim Costello noted the full impact on cross-border flows in 2026 will take several months to quantify, as it remains unclear whether policy uncertainty will deter foreign capital or whether the U.S. will revert to its traditional safe-haven role.
CRE lending activity reaches highest level in five years | Connect CRE / CBRE, May 11, 2026
The CBRE Lending Momentum Index rose to 1.5 at the end of Q1 2026, up from 1.2 at year-end 2025 and a five-year high. CBRE attributed the improvement to increased average loan sizes, a higher share of non-agency loans, relatively stable spreads, and improved loan-to-value ratios. The Q1 reading marks the fifth consecutive quarter of expansion. Prior CBRE data: Q4 2025 commercial mortgage spreads were 197 bps, multifamily 142 bps, with LTVs at 60.9% commercial and 66.2% multifamily. Full-year 2025 agency lending hit $150B (+25% YoY); CMBS issuance hit $158B in 2025, the highest since 2007. CBRE's James Millon has described the market as "bifurcated but increasingly healthy," with rising delinquencies and legacy loan sales being absorbed by a deep capital pool.
Retailers across categories are increasingly acquiring their own locations rather than leasing, driven by record-low vacancy, limited new construction, and stronger balance sheets that give major operators cheaper access to capital than many landlords. Notable deals include Walmart's $34 million purchase of Monroeville Mall near Pittsburgh in February 2025 and Dillard's $34 million acquisition of Longview Mall in East Texas last August. Luxury brands are especially active, with LVMH, Kering, Chanel, and Prada buying flagship properties in gateway markets including NYC's Fifth Avenue and Miami's Design District to control brand presentation and co-tenancy. Brokers at CBRE, Cushman & Wakefield, Northmarq, and Avison Young all cited supply constraints and rising rents as key drivers, with ownership converting a fixed occupancy cost into a depreciable asset while eliminating renewal risk. Elevated construction costs have pushed redevelopment to the forefront, and retailers with capital are stepping in to control timing and scope directly rather than depending on landlord-driven improvement cycles.
Mall owners across the country are expanding chaperone policies that ban unaccompanied shoppers under 18, responding to a wave of organized teen disruptions that have included fights, robberies, and in some cases gunfire. GGP's Willowbrook Mall in Houston implemented a requirement that anyone under 18 be accompanied by someone 21 or older after dozens of teens swarmed the property in late April, with organizers using social media to coordinate a follow-up visit. The Bronx's Mall at Bay Plaza saw 18 arrests in February under similar circumstances. Landlords report the bans have reduced violence without a measurable impact on sales, though the tension is real: Gen Z has shown stronger affinity for malls than millennials, and operators including Macerich have formed internal committees to study Gen Z spending habits and drive foot traffic from that cohort. Tanger's COO noted that teenagers represent a meaningful source of discretionary spending, framing the policies as crowd management rather than exclusion.
Construction costs rise 6.2% through April | Bisnow, May 13, 2026
Associated Builders and Contractors reported that U.S. construction input prices rose 6.2% in the first four months of 2026, surpassing the cumulative 4.8% increase recorded over the prior three years. Year-over-year, overall construction materials are up 7.0% from April 2025, with nonresidential materials up 7.4%. Month-over-month, total input prices climbed 1.7% between March and April. Energy is the primary driver: crude petroleum surged 11.3% month-over-month and 61.8% year-over-year, natural gas rose 4.9% and 27.3%, respectively, and unprocessed energy materials jumped 9.2% on the month. Softwood lumber rose 5.5% and hot rolled steel bars gained 4.1% in April. The data aligns with a broader wholesale inflation uptick, with PPI rising 1.4% in April versus March, more than double the prior month's pace and well above the 0.5% consensus.
'Yimby' has arrived in Illinois, and some cities don't like it | Wall Street Journal, May 15, 2026
Illinois Gov. JB Pritzker is pushing legislation that would strip municipalities of some zoning authority to accelerate multifamily housing development, joining California, Massachusetts, and Oregon in state-level YIMBY efforts. The bill would prohibit local governments from blocking construction of duplexes, triplexes, and four-flats on residential lots over 2,500 square feet, allow accessory dwelling units on single-family parcels, reduce parking minimums, permit single-stairway apartment buildings, and require municipalities to act on permit applications within defined timelines. Illinois home values average $290,210, up 4.9% over the past year, against a national average of $368,198 up just 0.6%, and a 2025 study estimated the state needs 227,000 new units over five years. A coalition of cities and towns has introduced a rival package that preserves local zoning control, proposing instead to cap agent fees at 3% and exempt building materials from state sales tax. No floor vote has been scheduled.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | A split market: Commercial real estate lending trends from Q1 2026
Lender quotes up 24% quarter-over-quarter, multifamily delinquencies at a new high, and hotels seeing the biggest spread compression of any sector. What is the Q1 2026 CRE debt data actually telling us?
Andrew Pabon, Altus Group's Director of Debt Advisory, joins the podcast to work through the results of the Q1 2026 US Debt Capital Markets Survey and what they mean for borrowers, lenders, and anyone navigating the current financing environment.
The conversation covers benchmark divergence between SOFR and treasuries, the maturity wall and its current impact on client conversations, the growing role of debt funds as banks rebalance their CRE exposure, and what private credit stress may mean moving forward.
Insight | Under the hood of niche valuations: The income side of the story
New data from Altus Group’s US Research and Valuation Advisory teams examines the underwriting assumptions behind niche property valuations. Contract rents, operating expenses, and NOI growth have all changed over the past five quarters, narrowing the cushion beneath niche's premium pricing stance. With niche assets still commanding the tightest cap rates in the market, this analysis provides a closer look.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, May 19
10:00AM: Pending Home Sales (Apr)
Thursday, May 21
8:30AM: Initial Jobless Claims (May 16)
8:30AM: Housing Starts (Apr)
8:30AM: Building Permits (Apr)
8:30AM: Philadelphia Fed Manufacturing Survey (May)
9:45AM: S&P Flash U.S. Services PMI (May)
9:45AM: S&P Flash U.S. Manufacturing PMI (May)
Friday, May 22
10:00AM: Consumer Sentiment — Final (May)
10:00AM: U.S. Leading Economic Indicators (Apr)
Upcoming Industry Events
May 17 – May 20: MBA CRE Servicing Solutions Conference (San Diego, CA)
May 18 – May 20: ICSC Las Vegas
May 19 – May 20: Real Estate Research Institute Annual Conference (Chicago, IL)
May 20 – May 21: NAIOP I.CON East (Jersey City, NJ)
May 28 – May 29: AREUEA National Conference (Washington, DC)
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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