CRE This Week - What's impacting the United States market?
August 10, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of August 10, 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
ISM Manufacturing PMI and S&P Global US Manufacturing PMI
The Institute for Supply Management released its July 2026 Manufacturing PMI on August 1, showing a reading of 55.6%, up 2.3 percentage points from June and the highest since May 2022. All five subindexes that directly factor into the composite were in expansion. Production jumped 6.3 points to 58.5%, the highest since November 2021, and the Employment Index rose to 52.8%, entering expansion for the first time in 33 months. New Export Orders returned to expansion at 53.0%, and the Backlog of Orders surged 4.5 points to 55.0%. The Prices Index eased slightly to 71.1% but has been in expansion for 22 straight months; respondents cited steel, aluminum, electronic components, and freight costs as primary drivers, with the Iran conflict mentioned in 43% of negative comments. S&P Global released its US Manufacturing PMI on August 3 at 53.9%, unchanged from June's three-month low, with output rising at the softest pace since March, new order growth easing for a third consecutive month, and business confidence hitting a nine-month low.
The divergence reflects the composition of each survey. ISM draws from purchasing executives at large, globally exposed manufacturers where AI infrastructure, defense, and transportation equipment spending appear to be driving outsized gains. S&P Global surveys a broader panel of roughly 600 firms stratified by size, capturing more mid-sized and domestically oriented producers where inflationary pressure, weaker export demand, and softer client confidence are more prominent. For industrial CRE, the Employment Index entering expansion after 33 months may signal gradual improvement in demand for light manufacturing and precision industrial space. The Prices Index remaining above 70% suggests input cost pressures persist, which could continue to weigh on new industrial construction feasibility and limit speculative development.
The U.S. Census Bureau released the Value of Construction Put in Place report for June 2026 on August 3. Total construction spending came in at a seasonally adjusted annual rate of $2,166.5 billion, down 0.1% from the revised May estimate of $2,168.5 billion and 3.2% below June 2025. Year-to-date spending of $1,046.9 billion is running 3.5% below the same period last year. Private nonresidential edged up 0.1% to $745.3 billion, with office up 2.8% on the month and 15.1% year over year to $115.8 billion. Manufacturing fell 1.2% monthly and 22.0% year over year to $170.3 billion, while power construction rose 0.7% monthly and 4.3% year over year to $157.9 billion. Note that these figures are nominal and not adjusted for inflation, and include renovations and improvements in addition to new construction.
The 3.5% year-to-date shortfall confirms that elevated financing costs and tighter construction lending are suppressing development activity broadly. The manufacturing decline reflects the post-IRA/CHIPS drawdown as major semiconductor and EV projects reach completion, removing a demand driver for industrial and build-to-suit space. Power construction growth continues to track data center and AI infrastructure investment. Reduced new supply is a modest tailwind for occupancy and rents in existing assets, though that benefit remains limited while borrowing costs and cap rate pressures continue to weigh on transaction activity.
Job Openings and Labor Turnover Survey
The Bureau of Labor Statistics released June 2026 JOLTS data on August 4. Job openings edged down to 7.4 million (preliminary) from a revised 7.5 million in May, with the openings rate holding at 4.4 percent. Gains in transportation, warehousing, and utilities (+97,000) and federal government (+39,000) were offset by declines in wholesale trade (-74,000) and nondurable goods manufacturing (-55,000). Hires were unchanged at 5.3 million (3.4 percent rate), as were quits at 3.2 million (2.0 percent) and layoffs at 1.8 million (1.1 percent). May openings were revised down 57,000 to 7.5 million.
Construction job openings rose to 305,000 in June from 291,000 in May and are up from 224,000 a year earlier, likely reflecting work on projects already underway rather than new pipeline formation, since total construction spending is running 3.5% below year-ago levels year-to-date. Real estate and rental and leasing openings increased to 117,000 from 101,000, also higher than the 88,000 posted in June 2025. Professional and business services openings slipped to 1.3 million from 1.4 million in May, a sector that accounts for a significant share of office leasing demand. Leisure and hospitality openings fell to 830,000 from 916,000, continuing a gradual decline that bears watching for hotel and experiential retail performance. The quits rate holding at 2.0 percent signals limited worker mobility and some easing in aggregate wage pressures, a modest positive for operating cost structures, though ADP's job-changer pay data, released a day later, suggests supply constraints in select segments are still pushing compensation higher for workers switching roles
ADP National Employment Report and the BLS July Employment Report
ADP and the Stanford Digital Economy Lab released the July National Employment Report on August 5, showing private employers added 44,000 jobs for the month. Education and health services (+36,000) drove the bulk of the gain, with small businesses adding 31,000 jobs across the sub-50 employee cohort. Job-changer pay growth accelerated to its fastest annual pace in nearly a year. The Bureau of Labor Statistics followed on August 7 with the official Employment Situation, covering both public and private payrolls, showing total nonfarm employment fell 23,000 in July, well below the trailing 12-month average of +34,000. Losses were concentrated in local government education (-50,000), retail trade (-19,000), and financial activities (-14,000), the last of which is now down 121,000 from its May 2025 peak. Health care added 22,000, below its recent monthly average. The unemployment rate held at 4.1%, and revisions to May and June removed a combined 103,000 jobs from prior estimates. Average hourly earnings rose 3.2% year-over-year but were essentially flat on the month.
Both reports point to the same pattern: growth concentrated in noncyclical sectors alongside persistent weakness in financial activities, retail, and office-using categories. Financial sector employment down 121,000 from its May 2025 peak is a direct headwind for office leasing demand, particularly in gateway markets. The 103,000 in downward revisions and a 153,000 jump in temporary layoffs to 921,000 suggest near-term payroll momentum could soften further. Wage growth at 3.2% year-over-year offers limited income support for multifamily demand as employment weakens.
S&P Global US Services PMI and ISM Services PMI
The Institute for Supply Management released the July 2026 Services PMI on August 5. The headline index edged up 0.1 percentage point to 54.1%, its 25th consecutive month in expansion; Business Activity rose 3.7 points to 59.1% and New Orders gained 2.1 points to 57.2%, while Employment dropped back into contraction at 47.4%, down 3.8 points from June. The Prices Index hit 70.3%, its fourth reading above 70% in five months, with the 12-month average at its highest since April 2023. Real Estate, Rental & Leasing was among the four industries contracting overall, with new orders and employment both declining. S&P Global's final Business Activity Index, also released August 5, came in at 54.6, up from 51.2 in June and above the flash estimate of 53.6, the highest in nine months; the Composite PMI rose to 54.5. S&P Global flagged that some of the acceleration reflected temporary demand from the FIFA World Cup and expanded Independence Day activity, and noted a sharp deterioration in export orders attributed to tariffs and the Middle East conflict.
Both surveys confirm solid services expansion heading into Q3, with S&P Global's model suggesting GDP growth could run around 2.3% annualized in Q3, though actual data won't be available for several weeks and the event-driven July lift will not repeat. The ISM employment contraction at 47.4% is the more consequential read for CRE; that index has been below 50% in 12 of the last 18 months, and headcount trends in professional services and finance are a primary driver of office leasing demand. Sustained price pressure, with ISM Prices at 70.3% for the fourth time in five months, continues to compress tenant margins across retail, hospitality, and service-oriented space. Strong Transportation & Warehousing readings in both surveys support near-term industrial demand.
News
News to know
News to know
Overall CMBS distress hits a 2026 high | Commercial Observer, August 3, 2026
CRED iQ's July 2026 data shows the overall CMBS distress rate rising to 10.91%, the highest reading of the year and the third consecutive monthly increase after a brief dip to 9.97% in April. The special servicing rate jumped 42 basis points to 10.38%, the sharpest single-month move of 2026, while the delinquency rate rose a steadier 24 basis points to 8.68%; the widening gap between the two suggests loans are being transferred proactively ahead of maturities rather than due to missed payments. Office leads by property type at 16.65%, roughly 53% above the market-wide average, while industrial (2.35%) and self-storage (0.28%) remain the healthiest sectors. Several West Coast and Midwest metros are running distress rates more than double the national average, driven primarily by special servicing rather than outright delinquencies.
Inspectors, building officials shrug off conversion scares | Bisnow, August 3, 2026
A structural failure at the former Pfizer headquarters conversion on 42nd Street in Manhattan, where two steel columns buckled after support elements included in the building's plans were never installed, triggered an NYC Department of Buildings inspection blitz that has since resulted in stop-work orders at three other conversion projects. Building officials in Washington D.C., Chicago, Dallas, and Denver said they have not escalated scrutiny in response; the national conversion pipeline stood at more than 90,000 apartments at the start of the year, up 28% year-over-year. Developers and industry observers note that the added complexity of building atop existing structures, far more common in New York than elsewhere, heightens risk, though embedded structural unknowns are a baseline challenge in any older building conversion regardless of scope.
Loudoun County, Virginia, home to roughly 53M SF of data centers and a 40M+ SF pipeline, is exploring a pause on new facility applications after the Board of Supervisors approved a 6-1 motion directing staff to present proposed language at a Sept. 15 meeting. Data centers account for 38% of the county's general fund revenue and generated $875M in taxes in 2024. The core legal obstacle is Virginia's Dillon's Rule, under which localities can only act on powers expressly granted by the state; the county's own website acknowledges it lacks authority to impose a moratorium. Other Virginia jurisdictions have framed similar actions as application processing delays rather than moratoriums, a path Loudoun is likely to examine, while zoning ordinance amendments remain the more permanent alternative. The proposed pause is intended to allow time for a Phase 2 data center impact study, with results expected in spring 2027.
Bonus depreciation is driving a rush to close deals before year-end | GlobeSt, August 5, 2026
With bonus depreciation back in play, sponsors are increasingly running two-track underwriting models that layer after-tax returns on top of traditional pre-tax fundamentals, using cost segregation to front-load depreciation on short-life components such as specialized equipment, underground storage tanks, and commercial kitchens across asset classes including industrial, hospitality, and multifamily. The core tension is on the debt side: lenders underwrite cash flow and debt service coverage, not tax outcomes, so accelerated depreciation improves after-tax returns without moving any of the metrics that drive loan decisions. As year-end approaches, the risk is compressed timelines and investors chasing marginal deals to capture tax benefits before December 31; the consistent message is to engage advisers early and treat tax strategy as a return enhancer on fundamentally sound deals, not a substitute for durable cash flow.
New law uses HUD grants to push zoning and permitting changes | GlobeSt, August 6, 2026
The 21st Century ROAD to Housing Act restructures HUD's Community Development Block Grant program by tying CDBG allocations to local housing production, rewarding jurisdictions that expand their housing footprint and cutting grants by up to 10% for those that fall short. For most cities, the financial impact is marginal: CDBG dollars represent roughly 0.333% of the typical municipal budget, making a 10% penalty worth about 0.0333% of revenues. The incentive carries more weight in Northeast and Midwest cities where CDBG funding is a larger share of local revenues, including Pittsburgh at 1.77%, Cleveland at 1.40%, and Saint Louis at 1.11%. In those markets, the new structure could be enough to push local officials toward faster permitting and zoning reform, with downstream effects on multifamily supply pipelines and broader CRE demand. For investors in major Sun Belt and coastal markets, where CDBG dollars are a footnote in city budgets, the law is unlikely to change the fundamental housing supply picture.
CMBS investors push back against AI as 'Luddite Trade' spreads | Bloomberg, August 6, 2026
Investor appetite for data center CMBS is softening, with two of the last three deals backed by data centers forced to widen pricing from initial guidance to attract sufficient demand. Spreads on AAA-rated single-borrower data center CMBS have widened to 168 basis points over SOFR from 153 basis points a year earlier; BBB- spreads moved to 332 from 321 basis points over the same period. Data center CMBS now represents 7.3% of total CMBS issuance year-to-date at roughly $5.7 billion, a growing share driven by AI-linked deals as tech companies have borrowed over $385 billion globally in 2026 to fund buildouts. Some institutional investors are pulling back, citing uncertainty over property valuations, heavy supply, and structural complexity in newer deals, including features like optional early repayment dates borrowed from the data center ABS market. JPMorgan projects hyperscalers will spend roughly $5.5 trillion on AI infrastructure through 2030, suggesting the debt supply weighing on spreads is unlikely to ease near term.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Capital rotation, real assets, and a new era for CRE deals
What does a new era for CRE deals look like, and what's driving it?
That's the central question in the latest CRE Exchange, where Omar Eltorai sits down with Tim Bodner, who leads PwC's US and global real estate deals practice, to discuss the firm's 2026 midyear CRE outlook. Tim walks through how capital rotation toward real assets is redefining the dealmaking landscape, why operational prowess now drives value where cap rate compression once did, and what PwC is seeing in REIT consolidation and private capital activity.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, August 12
6:00 AM: NFIB Small Business Optimism Index (Jul)
10:00 AM: Existing Home Sales (Jul)
Wednesday, August 13
8:30 AM: Consumer Price Index (CPI) (Jul)
2:00 PM: Monthly Treasury Balance (Jul)
Thursday, August 14
8:30 AM: Weekly Jobless Claims (Aug. 8)
8:30 AM: Producer Price Index (PPI) (Jul)
Friday, August 15
8:30 AM: Retail Sales (Jul)
10:00 AM: Manufacturing & Trade Inventories (Jun)
10:00 AM: U. Michigan Preliminary Consumer Sentiment (Aug)
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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