CRE This Week - What's impacting the United States market?
September 15, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of September 15, 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
The Federal Reserve’s September 9 G.19 report showed that consumer credit picked up in July, with total outstanding debt rising at a 3.8 percent annualized monthly rate, the strongest pace since April. Revolving credit, made up largely of credit cards, climbed 9.7 percent, the fastest increase since December 2024, while nonrevolving credit, including auto and student loans, rose just 1.8 percent, the slowest monthly gain since March. For the second quarter, consumer credit outstanding was revised up to a 2.8 percent annualized rate from 2.3 percent. Even with July’s stronger reading, this marked the eighth straight quarter where consumer credit growth has stayed below 3 percent, a slower pace compared with the 5 percent or more that was common during much of the 2010s.
The figures point to some consumer resilience in the near term, though cracks are beginning to emerge beneath the surface. The strength in revolving credit suggests households are still leaning on credit cards to sustain spending, which should help support the retail and hospitality sectors in the months ahead. Yet the slowdown in nonrevolving credit signals a broader pullback on longer-term financial commitments, raising questions about the sustainability of household demand. This week’s upcoming retail sales release on September 16 will provide a clearer sense of where this borrowing is being directed and whether consumer spending has the staying power to carry into the fall.
NFIB Small Business Optimism Index
The National Federation for Independent Business (NFIB) released its Small Business Economic Trends Report for August on September 9. The headline Small Business Optimism Index (SBOI) inched up 0.5 points to 100.8, nearly 3 points above the long-term average of 98. The gain was driven by a stronger outlook for sales, with the share of owners expecting higher revenues rising six points from July, alongside some improvement in earnings trends and less concern over financing conditions. Labor quality remains the top challenge, with 21 percent of owners citing it as their most important problem and about 32 percent still reporting unfilled job openings. While the Uncertainty Index fell four points to 93, it remains at an elevated level compared to historical norms.
Small businesses are key drivers of demand across retail, industrial, and office space, and together they account for a large share of leasing activity in nearly every U.S. market. Sustained optimism, especially around sales, points to some momentum that could support storefront expansion, new warehouse or distribution needs, and steady demand from professional service firms. However, hiring remains a challenge, and owners may hold back on taking on additional space until they are confident they can staff it. Even so, the general improvement in sentiment is an encouraging sign that small business activity can continue to provide a baseline level of support for CRE as economic uncertainty plays out.
Producer Price Index and Consumer Price Index
The Bureau of Labor Statistics (BLS) released the Producer Price Index (PPI) for August on September 10. Headline PPI for final demand fell 0.1 percent but rose 2.6 percent annually. Core PPI (which excludes food, energy, and trade services, also fell 0.1 percent but was up 2.8 percent annually.
One day later, BLS released the Consumer Price Index (CPI) for August, showing headline inflation increasing 0.4 percent month-over-month and 2.9 percent annually. Core CPI (excluding food and energy) rose 3.1 percent annually.
The PPI release showed that tariff-driven pressures are taking longer than expected to flow through, potentially offering some relief on construction input costs. Meanwhile, the CPI report confirmed that consumer inflation remains sticky, but it was paired with a larger-than-expected rise in jobless claims, and markets rallied on the expectation that the Fed will cut rates this week. As of September 12, the CME FedWatch tool priced in near certainty of a 25 bps cut and even some chance of a 50 bps move, while the 10-year U.S. Treasury yield dropped to just above 4 percent.
For CRE, lower borrowing costs are set to offer some support to refinancings and deal activity, but elevated consumer prices could continue to pressure tenants and drive up operating costs.
University of Michigan Consumer Sentiment Index
On September 12, the University of Michigan released the preliminary results of the Consumer Sentiment Index for September, showing that Index fell to 55.4 from 58.2 in August, the lowest reading since May. The current conditions subindex slipped to 61.2 from 61.7, while expectations declined to 51.8 from 55.9. Inflation expectations held at 4.8 percent over the next year and rose to 3.9 percent over a five-year horizon.
The combination of weaker consumer sentiment and higher reliance on credit cards points to near term spending resilience but growing caution beneath the surface. Retail and hospitality properties may benefit in the short run as households continue to lean on revolving credit to support day-to-day spending. However, the slowdown in nonrevolving credit suggests less willingness to take on long term financial commitments, raising concerns about the durability of demand into the fall. For CRE, this mix signals that while foot traffic and sales could hold up temporarily, tenant health may be increasingly fragile, particularly for sectors tied to discretionary purchases. Owners and investors will need to balance short-term consumer support with the risk of softer demand ahead.
News
News to know
NYC developers build 99-Unit buildings to avoid wage requirements | Bloomberg, September 9, 2025
New York developers are increasingly filing permits for 99-unit apartment buildings to sidestep wage mandates tied to the state’s new 485-x tax incentive program, which requires workers on projects with 100 or more units to earn at least $40 an hour. The law, intended to spur affordable housing after the lapse of 421-a, has instead pushed builders toward smaller, costlier projects that deliver fewer units and take longer to complete. While 485-x has restarted some stalled construction, industry leaders argue its wage requirements threaten to limit scale and slow efforts to ease the city’s housing shortage, raising questions about whether the program can meet New York’s ambitious production goals.
With Zohran Mamdani holding a strong lead in the NYC mayoral race, many developers are moving from opposition to engagement, seeking common ground on faster building approvals and a property tax overhaul that could shift more burden to luxury condos and co-ops while easing pressure on rental properties. Industry groups and executives have begun meeting with Mamdani and sharing policy ideas, including incentives to activate vacant rent-stabilized units, even as concerns persist over his proposed rent freeze and higher taxes on wealthy residents. Some players still back Andrew Cuomo’s third-party bid, but most of the sector is hedging and preparing to work with a Mamdani administration to streamline approvals and stabilize operating costs.
Despite new federal limits on renewable energy tax credits under the One Big Beautiful Bill Act, demand for C-PACE financing is expected to keep growing. Bali Kumar of PACE Loan Group said C-PACE remains unaffected because it is state-enabled and privately funded, with more states recently expanding access. In fact, the legislation’s extension of Opportunity Zones could spur additional C-PACE activity as developers look to finance upgrades like HVAC, windows, and electrical in redevelopment projects. With interest rates staying higher for longer, C-PACE is also helping sponsors lower overall capital costs, and new provisions such as 100% first-year depreciation for energy improvements may further encourage adoption.
U.S. retailers are facing mounting pressure as declining tourism, tariff uncertainty, and cautious consumers weigh on foot traffic and spending. International arrivals are expected to fall 8.2 percent this year, mall visits slipped more than 4 percent year-over-year in August, and Gen Z is pulling back spending by over 20 percent, favoring cheaper online platforms. While live events such as the Oasis tour have temporarily boosted traffic in certain markets, tariffs are driving higher costs that retailers can no longer fully absorb, pushing shoppers toward dollar stores and value chains. With consumer savings low, debt levels high, and employment growth revised down, the health of the consumer remains the most critical factor shaping retail performance heading into the holiday season.
Student loan debt squeezes multifamily rent prospects | GlobeSt, September 11, 2025
Student loan burdens are increasingly weighing on multifamily demand, with Ivy Zelman warning that rising delinquencies among renters, especially those earning under $50,000, are eroding credit health and lease-up prospects. With forbearance lapsing, resumed payments are triggering credit score declines and wage garnishments, adding to pressures from utilities, medical costs, and food. Zelman’s surveys indicate about 10 percent of prospective buyers are denied mortgages due to student debt, while roughly 14 percent of would-be multifamily tenants face student-loan-related credit hurdles, contributing to slower absorption in several markets. The takeaway for owners and investors is a need to temper rent growth assumptions and plan for greater turnover and credit risk as student loan headwinds persist.
Blackstone inks deal for $869M in single-tenant retail debt | GlobeSt, September 12, 2025
Blackstone is set to acquire nearly $869M in single-tenant retail loans from First Internet Bancorp, marking another step in its $22B expansion into real estate credit. The loans, tied to tenants such as pharmacies, quick-service restaurants, and car washes, will trade at about 95% of unpaid principal balance, with First Internet continuing servicing support. The deal represents roughly 20% of First Internet’s debt portfolio and comes as the bank trims its balance sheet to manage credit pressures and improve profitability. For Blackstone, it follows a series of discounted portfolio buys as the firm capitalizes on market dislocations, while First Internet looks to rebuild margins and expand its origination partnership with Blackstone.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Cooling jobs, rising costs, and where commercial real estate sectors are still winning
CRE firms face cooling labor markets, rising costs, and mounting uncertainty. On the latest CRE Exchange podcast, Omar Eltorai and Cole Perry break down these challenges through recent economic data and point to the property types showing resilience.
Article | Convergence at the top, divergence underneath: Service-oriented CRE price trends
On the surface, single property transaction prices across retail, office, and hospitality hovered around $140/SF in Q2 2025. But beneath the symmetry, very different stories are unfolding.
Subsectors like automotive, restaurants, medical office, and full-service hotels are each moving with different trajectories.
Associate Director of US Research, Cole Perry, breaks down the hidden divergence across service-oriented subsectors this year.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, September 16
8:30 AM: U.S. Retail Sales
10:00 AM: Business Inventories
10:00 AM: Home Builder Confidence Index
Wednesday, September 17
8:30 AM: Building Permits + Housing Starts
2:00 PM: FOMC Interest Rate Decision
About our research team
Omar Eltorai
Research Director
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
Latest insights
Sep 9, 2025
Convergence at the top, divergence underneath: Service-oriented CRE price trends
