CRE This Week - What's impacting the United States market?
February 2, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of February 2, 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 Conference Board reported on January 27, 2026, that U.S. consumer confidence fell sharply during the month. The headline Consumer Confidence Index declined 9.7 points to 84.5, the lowest reading since 2014. The Present Situation Index, which reflects views on current business and labor market conditions, dropped to 113.7. The Expectations Index, which captures the short-term outlook for income, business conditions, and jobs, fell to 65.1, well below the 80 level historically associated with rising recession risk. All major components of the survey weakened month over month, pointing to broad-based deterioration in sentiment.
The decline in confidence signals a consumer who is becoming more cautious, raising the risk of softer spending in the months ahead. For the broader economy, weakness in expectations suggests households may pull back on discretionary and big-ticket purchases, which could slow overall growth. For commercial real estate, weaker sentiment may weigh on retail and hospitality demand, where tenant performance is closely tied to consumer spending. More broadly, deteriorating confidence reinforces a risk-averse backdrop that could prolong slower leasing, investment activity, and capital deployment across property sectors as both occupiers and investors remain selective.
At its January 28, 2026 meeting, the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 3.50% to 3.75%. The Committee said it will continue to carefully assess incoming data, the evolving economic outlook, and the balance of risks before making further policy adjustments, while reiterating its commitment to maximum employment and returning inflation to its 2 percent objective. Two policymakers dissented, favoring a quarter-point rate cut at this meeting.
With several rate cuts already delivered in late 2025, the pause was viewed as giving markets time to absorb prior easing while reducing near-term volatility in financing conditions. Long-term Treasury yields remain the primary driver of pricing for CRE, but a steady policy rate helps improve visibility for underwriting and refinancing decisions. The prevailing view is that predictability, more than immediate additional cuts, is what matters most for deal activity early in 2026, particularly for well-capitalized owners and higher-quality assets, as markets continue to look toward the potential for gradual easing later in the year.
The Bureau of Labor Statistics released the Producer Price Index for December on January 30. Headline PPI rose 0.5 percent month over month, above expectations, while prices were up 3.0 percent from a year earlier. The monthly increase was driven primarily by services, including trade services, transportation, and travel-related categories, while goods prices were roughly flat. Core PPI, which excludes food and energy, also increased at a firm pace, pointing to continued inflation pressure at the producer level.
The stronger PPI print suggests inflation pressures remain embedded in the cost structure of the economy, particularly on the services side, which could limit the Fed’s flexibility to cut rates quickly. For commercial real estate, elevated producer prices signal continued pressure on operating expenses and construction costs, even as rent growth slows in some sectors. At the same time, inflation running above target supports higher nominal cash flows, helping offset higher borrowing costs. The net impact remains mixed, with refinancing and deal activity still constrained by rates, but fundamentals holding up better in property types with pricing power and contractual rent escalations.
News
News to know
Regional banks return to CRE lending as rates ease | GlobeSt, January 26, 2026
Regional banks are slowly reentering commercial real estate lending as interest rates ease and underwriting remains conservative, marking a shift from the sharp pullback that followed the 2022 rate hikes. Executives report improving refinancing activity, particularly in multifamily, stabilizing CRE loan balances, and better pricing on new originations, with growth expected to be modest and focused on higher-quality assets. While office exposure continues to decline, banks say paydowns are slowing, and conditions are improving enough for selective expansion heading into 2026.
REIT IPOs vanish as CRE chooses private capital over public markets | Bisnow, January 26, 2026
REIT IPO activity remains near historic lows as commercial real estate firms continue to favor private capital over public markets, despite easing rates and improving returns. After no REIT IPOs in 2022 or 2023 and just one in 2025, abundant private equity dry powder, rising public to private deals, and claims of public market undervaluation have reduced the incentive to list. Even data centers, one of the strongest growth themes in CRE, have largely moved private following a wave of acquisitions, leaving only Digital Realty Trust and Equinix as major pure play public options. With private funds, family offices, and high net worth investors offering capital without public market volatility or disclosure costs, industry participants expect M&A and take-private transactions to remain more attractive than IPOs in the near term.
Co-working is rebounding as a more flexible, disciplined version of the model gains traction in a hybrid work environment, with total U.S. co-working space rising to about 158 million square feet from roughly 116 million three years ago, according to Yardi. Unlike the pre-pandemic boom dominated by large chains like WeWork, growth is now being driven by single-site operators and smaller networks, alongside corporate-focused platforms such as Industrious, which has expanded following CBRE’s acquisition of a controlling stake. Large occupiers, including Pfizer, Amazon, and JPMorgan Chase, are increasingly using co-working for satellite offices, allowing them to avoid long leases, adjust space quickly, and offer amenities closer to where employees live. As a result, co-working now accounts for about 2.2 percent of U.S. office stock and could grow meaningfully further as companies continue to prioritize flexibility over permanent space commitments.
New York City’s Community Opportunity to Purchase Act will not move forward after the City Council failed to secure the supermajority needed to override a veto by former mayor Eric Adams. Council Speaker Julie Menin opted to let the veto stand after legal concerns, including warnings from Mayor Zohran Mamdani’s law department that the bill could be unconstitutional, made passage unlikely. The legislation would have given nonprofits a first right of refusal on certain multifamily properties, and its demise is viewed by owners and investors as removing a potential constraint on apartment sales, though Mamdani’s administration has signaled it may pursue narrower or voluntary alternatives in the future.
Tech drives growth in US office demand for 2025 | Connect CRE, January 28, 2026
Office demand in 2025 was driven almost entirely by the tech sector, according to the VTS Office Demand Index. Tech leasing surged 87 percent year over year nationwide, far outpacing the broader office market, where demand rose just 6 percent. Tech-heavy markets led the rebound, with Seattle and San Francisco posting year-over-year office demand gains of roughly 46 percent and 45 percent, respectively, reflecting continued expansion by AI-focused companies even as other industries remained more cautious about taking space.
President Donald Trump has nominated former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as Fed chair, a move welcomed by parts of the commercial real estate industry. Warsh, who served on the Fed’s board during the 2008 financial crisis, is viewed by many in CRE as a steady choice who understands financial markets and the importance of central bank credibility. Despite Trump’s public criticism of Powell over interest rates, industry observers say Warsh’s background at the Fed has reassured investors and lenders that the institution’s independence is likely to be preserved under his leadership.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Why 2026 could be a surprisingly strong year for CRE credit
What happens when a cooling labor market, easing financing conditions, and renewed activity on housing policy all converge at once? This week on CRE Exchange, Omar Eltorai and Cole Perry discuss how these forces are shaping the early narrative for the 2026 commercial real estate market.
Article | What CREFC Miami revealed about CRE debt markets in 2026
The CRE Finance Council's annual conference kicked off earlier this month in Miami Beach, bringing together lenders, credit investors, and service providers across the CRE debt ecosystem. Our research team was there to take a pulse check on the market, and the sentiment was more optimistic than a year ago.
Check out our takeaways from the event.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, February 2
10:00AM: ISM Manufacturing Index
Tuesday, February 3
10:00AM: Job Openings and Labor Turnover Survey
Wednesday, February 4
8:15AM: ADP Employment
Friday, February 6
8:30AM: January Employment Report
10:00AM: Consumer Sentiment (preliminary)
3:00PM: Consumer Credit
Upcoming industry events
February 3-5: Inman Connect (New York, NY)
February 8-11: MBA Commercial Finance Convention (San Diego, CA)
February 11-13: AFIRE Winter Conference (Washington, DC)
February 25-28: CORFAC Spring Conference (New Orleans, LA)
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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