CRE This Week - What's impacting the United States market?
December 8, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of December 8, 2025
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
S&P U.S. Manufacturing PMI and ISM Manufacturing PMI
The Institute for Supply Management (ISM) released the Manufacturing Purchasing Managers Index (PMI) for November on December 1. The Index slipped to 48.2, down from 48.7 in October, signaling another month of contraction across a broad set of U.S. factory operators. Weakness showed up in new orders, employment, and production, and only supplier deliveries remained somewhat firm.
The S&P Global Final U.S. Manufacturing PMI, released the same day, told a different story, with the index rising above the 50 threshold to 52.2 and pointing to modest expansion. That survey highlighted pockets of improving output and steady new business, even as cost pressures and inventory accumulation continued to weigh on operating conditions.
The ISM and S&P Global surveys often diverge because they reflect different parts of the manufacturing sector. ISM’s data skews toward large, established producers with global supply chains, making it more sensitive to freight costs, backlogs, and tariffs. S&P Global surveys a broader range of mid-sized, fast-growing manufacturers in lighter-industrial and high-value-added areas like electronics and medical equipment. ISM therefore captures the slowdown in traditional goods production, while S&P Global reflects resilience in more domestic, innovation-oriented manufacturing.
This divergence suggests the manufacturing sector is fragmenting rather than weakening uniformly. Large goods producers tied to global trade face more pressure, while specialized and flexible manufacturers remain steadier. For commercial real estate, that means bulk distribution and heavy industrial demand could soften, but advanced manufacturing, life sciences, and precision suppliers may sustain demand for higher-quality light-industrial and R&D space. Industrial performance in 2026 may likely hinge more on tenant mix than on broad macro trends.
ADP National Employment Report
ADP and the Stanford Digital Economy Lab released the November National Employment Report on December 3, showing that private employers cut about 32,000 jobs, reversing October’s modest gain. Wage growth also cooled slightly, with pay for job stayers rising 4.4 percent from a year ago and job changers seeing 6.3 percent growth. The weakness was broad based, with the sharpest losses among small businesses and in sectors such as manufacturing, information, and professional and business services.
The softer ADP reading suggests a labor market that is losing momentum at a delicate moment. Slower hiring from small and mid-sized firms often signals weaker demand for office, retail, and industrial space, and could further stretch decision timelines for tenants. It also raises concerns about household income growth heading into year end. With no additional BLS employment data arriving before next week’s Federal Reserve meeting, this report will carry more weight than usual, potentially reinforcing expectations that policymakers may lean toward easing if they see further signs of cooling.
The Bureau of Economic Analysis released the Personal Consumption Expenditures (PCE) Price Index for September on December 5, showing that inflation moved mostly as expected heading into the December 10 Fed meeting. Headline PCE rose 2.8 percent annually, with a 0.3 percent monthly gain, while core PCE increased 2.8 percent annually and 0.2 percent on the month.
An in-line PCE report helps maintain a more predictable policy backdrop at a time when government inflation data is still arriving with significant delays due to the shutdown. As of December 5, the CME FedWatch tool placed the probability of a 25 basis point cut at 87.2 percent. Even so, inflation remains above the Fed’s 2 percent target, which limits how quickly borrowing costs can fall. This may suggest modest near-term support for refinancing and transaction activity, along with a clearer foundation for underwriting as markets adjust to a slower but steadier flow of economic data.
The University of Michigan released the preliminary of the Consumer Sentiment Index for December on December 5, showing a modest improvement. The headline index rose to 53.3 from 51.0 in November, slightly above expectations. The gain was driven by better views of personal finances and a small rebound in buying conditions. Inflation expectations eased as well. One-year expectations fell from 4.5 percent to 4.1 percent, and five-year expectations edged down to 3.2 percent.
Although sentiment remains low, the December uptick suggests consumers may be regaining some confidence heading into year-end. Even small improvements can help support demand in retail, hospitality, and other service-oriented segments. At the same time, weak sentiment reflects continued concerns about prices and the labor market, which still weigh on household budgets. The easing in inflation expectations is a constructive sign, but confidence remains fragile and will depend on clearer progress on inflation and a steadier labor market.
News
News to know
Boston rental market cools, leaving landlords 'willing to do anything' | Bloomberg, December 1, 2025
Boston's rental market is cooling significantly due to research funding cuts and a downturn in the biotech sector, leading to the highest vacancies since the pandemic. Average asking rents dipped to $3,043 in October, the first decrease since 2021. Landlords are offering concessions like months of free rent and lower prices, with some vacancies lasting over 160 days. Additionally, a proposed ballot initiative seeks to cap rent increases at 5% or CPI, whichever is lower.
The Federal Reserve faces a difficult interest rate decision on December 10 due to a lack of official government data caused by a federal shutdown. Key reports on inflation and employment have been delayed or cancelled, forcing officials to rely on older data and personal judgment. Analysts expect a 25-basis-point cut, potentially passing on a narrow 7-5 vote—a historically unprecedented split. While a cut is the majority expectation, the "data fog" increases the risk of policy error.
State signs off on three casinos for NYC | The Real Deal, December 1, 2025
The New York Gaming Facility Location Board recommended awarding casino licenses to three proposals: Steve Cohen’s $8 billion Metropolitan Park in Queens, a $4 billion Bally’s project in the Bronx, and a $7.5 billion expansion of Resorts World. The decision eliminates Manhattan bids from the running. License terms are tied to investment size: Metropolitan Park and Resorts World qualify for 20-year licenses, while Bally’s qualifies for 15 years. The proposals now move to the Gaming Commission for final issuance.
Retailers are snatching up real estate again | Wall Street Journal, December 2, 2025
Retail real estate strengthened in the third quarter as retailers absorbed 5.5 million more square feet than they vacated, helped by discount chains expanding into space left behind by recent bankruptcies. Vacancy remained tight at 4.3 percent due to limited new construction, and landlords are often securing stronger tenants at higher rents when replacing failed chains. Despite this improvement, 2025 is still expected to end with net store closures, and rent growth has cooled as online sales rise and inflation-adjusted retail sales stay flat. Smaller retailers are feeling the most pressure, but consumer spending has remained resilient enough to support continued demand from national chains.
Rising age of first-time homebuyers drives multifamily demand | GlobeSt, December 3, 2025
Marcus & Millichap finds that the median age of first-time homebuyers has risen to 40 in 2025 as high mortgage rates and elevated home prices keep ownership out of reach for many households, widening the affordability gap with renting. Only 28 percent of households can qualify for a mortgage on a median-priced home, and monthly payments are about $1,200 higher than average apartment rents, which is supporting strong multifamily retention and demand. Home-related retail spending has dropped more than 20 percent from its 2021 peak, but retail real estate tied to housing activity remains resilient, with vacancies at lifestyle and power centers near 4.7 percent.
Boston office slump deepens as mayor pushes for higher taxes | Bloomberg, December 3, 2025
Preliminary city figures show Boston’s commercial property values are set to fall another 6 percent in fiscal 2026, with office and lab buildings continuing a two-year slide as vacancies remain high and investor demand weak. Because residential values are rising while commercial values fall and state law limits how much the tax burden can shift, homeowners now face the largest share of the property tax load in decades, with the average single-family tax bill up 13 percent this year and on pace to climb 34 percent over three years. Mayor Michelle Wu is renewing her push to raise commercial property taxes to ease the burden on homeowners, but business groups argue the proposal would further strain a sector already dealing with nearly 27 percent downtown office availability, cooling life sciences demand and broader economic uncertainty. Wu has asked city departments to curb spending, is exploring new revenue sources and wants changes to Proposition 2.5 to give Boston more flexibility as it awaits final approval of the new assessments.
Fed to keep watch on multifamily and office CRE lending | GlobeSt, December 5, 2025
The Fed’s latest Supervision and Regulation Report says the banking system remains strong but highlights rising CRE risks at community and regional banks, especially those concentrated in office and multifamily lending. Delinquencies on CRE and consumer loans now sit above their 10 year averages, prompting regulators to focus on underwriting practices, credit loss reserves, and the increased use of loan modifications that resemble “extend and pretend.” Elevated rates, tighter standards, and lower property values are making refinancing more difficult, yet many banks have little incentive to sell distressed assets. The report signals that while conditions remain stable, CRE exposures at smaller lenders are receiving heightened supervisory attention.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Article | US CRE transactions analysis – Q3 2025
CRE pricing hit a new marker in Q3.
Median price per square foot is now at a post-COVID high, rising 14.2% YoY and 2.9% QoQ, supported by gains across nearly all property types.
Our latest insight article walks through the underlying trends from the Q3 2025 US CRE Investment & Transactions Quarterly report, connecting national and market-level shifts to sector performance.
Podcast | The CRE picture sharpens as delayed government data lands
The US economic data drought is over, and the numbers reveal a mix of resilience and risk. Join Omar and Cole as they discuss recent releases of the Quarterly Banking Profile, PPI, Consumer Confidence Index, and Advance Retail Trade Report and translate them into implications for capital availability, demand, and development pipelines.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, December 9
6:00AM: NFIB Small Business Optimism Index, Data Release
10:00AM: Job Openings and Labor Turnover Survey, Data Release
Wednesday, December 10
2:00PM: FOMC Interest Rate Decision
Upcoming industry events
December 8 – December 11: NAREIT REITworld Annual Conference
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.
Resources
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