CRE This Week - What's impacting the United States market?
February 16, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of February 16, 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
NFIB Small Business Optimism Index
The National Federation of Independent Business released its Small Business Economic Trends report for January on February 10. The headline Small Business Optimism Index slipped modestly to 99.3, down 0.2 points from the prior month but still above its 52-year average of 98. Only three of the ten components improved, led by a 6-point increase in expected real sales. The Small Business Employment Index eased to 101.6, remaining above its long-term average and signaling continued but cautious hiring. Capital spending held relatively firm, marking the highest share of owners making outlays since late 2023, though plans for future investment declined.
For the broader economy and commercial real estate, the data point to stable but cautious conditions. The Uncertainty Index rose to 91, reflecting growing hesitation around expansion decisions. Above-average optimism and improving sales expectations suggest small businesses continue to support baseline economic activity, underpinning demand for neighborhood retail, service-oriented space, and smaller office users. At the same time, elevated uncertainty and persistent cost pressures, particularly around labor quality and insurance, are likely to delay expansion and new leasing decisions. For CRE, this reinforces a slow and uneven recovery, where space demand stabilizes first while stronger leasing momentum depends on clearer signals around growth, policy, and financial conditions later in 2026.
The U.S. Census Bureau released its advance estimate of retail and food services sales for December 2025 on February 10, showing total spending of $735 billion, essentially flat month over month. On a year-over-year basis, sales were up 2.4 percent, marking the slowest annual growth rate since September 2024. For full year 2025, total sales rose 3.7 percent compared to 2024. Excluding automobiles, growth was firmer at 3.3 percent year over year, but retail trade sales alone increased just 2.1 percent. Importantly, these figures are reported in nominal terms and are not adjusted for inflation, suggesting real spending growth was likely weaker and potentially flat once price increases are accounted for.
The flat December reading and slowing annual growth rate point to a consumer that is losing some momentum heading into 2026. Because consumer spending accounts for roughly two-thirds of U.S. GDP, softer retail activity could weigh on near-term economic growth, particularly if inflation-adjusted sales are stagnating. For commercial real estate, slower real spending growth may temper leasing demand in discretionary retail categories and reduce expansion plans among retailers. That said, essential and service-oriented tenants may remain more resilient. More broadly, softer consumer data could reinforce expectations for a more accommodative monetary policy path, which would provide some relief to CRE capital markets even as property-level fundamentals show signs of cooling.
After a slight delay caused by the recent partial federal government shutdown, the Bureau of Labor Statistics released the January 2026 employment report on February 11. The data showed that non-farm payrolls increased by 130,000 in January, coming in above expectations, while the unemployment rate edged down to 4.3 percent. Job gains were concentrated in health care, social assistance, and construction, while federal government employment declined.
However, the report also included significant annual benchmark revisions to 2025 data. Total non-farm job growth for 2025 was revised down sharply from 584,000 to 181,000, and employment levels for several months were marked lower, including a roughly 898,000 downward revision to March payroll levels.
With 2025 payroll growth now averaging roughly 30,000 jobs per month, the labor market looks materially softer than previously reported. Even January’s improvement was concentrated in non-cyclical sectors such as health care and social assistance, which are less directly tied to office leasing, discretionary retail spending, or broader business expansion. That suggests limited near-term acceleration in the core demand drivers that typically move major property sectors.
From a financing perspective, the report sends mixed signals. The stronger January headline and lower unemployment rate could reduce the urgency for immediate rate cuts. At the same time, the weaker revised trend reinforces the view that underlying economic momentum has slowed. For CRE lenders and investors, that ambiguity keeps the outlook fluid, with borrowing costs and cap rate expectations likely to hinge on whether hiring broadens in the coming months or remains concentrated in defensive segments.
The National Association of Realtors reported that existing-home sales fell 8.4% in January to a seasonally adjusted annual rate of 3.91 million, the slowest pace since December 2023 and down 4.4% year over year. All four major regions posted monthly declines. Despite weaker transaction activity, the median existing-home price rose 0.9% year over year to $396,800, marking the 31st consecutive month of annual price gains, though growth remains among the slowest in recent years. The average 30-year fixed mortgage rate was 6.10% in January, down from both December and a year ago. NAR noted that unusually cold and wet weather may have contributed to the monthly pullback.
Single-family housing affordability has improved modestly, with NAR’s Housing Affordability Index at its best level since March 2022, supported by slightly lower mortgage rates and slower price growth. Even so, transaction volumes remain subdued, suggesting many households are still priced out or reluctant to buy. That has extended renter tenure and sustained demand for multifamily units, helping support occupancy across many markets. However, if weak sales reflect slower household formation or cooling income growth rather than temporary weather effects, it would signal a broader loss of economic momentum, with downstream implications for consumer spending and leasing demand across property sectors.
The Bureau of Labor Statistics released the January 2026 Consumer Price Index (CPI) on February 13. Headline CPI rose 0.2% month-over-month on a seasonally adjusted basis, while the annual rate slowed to 2.4%, down from 2.7% in December and the lowest reading since mid-2025. The print came in below consensus expectations, reinforcing signs that price pressures are gradually easing. Core CPI (excluding food and energy) increased 0.3% on the month and 2.5% year-over-year, marking the smallest annual core gain since early 2021.
While the report is unlikely to alter expectations for the fed funds rate, as markets continue to price in a hold at the March 18 FOMC meeting, the reaction in longer-term rates was more consequential. Following the softer inflation print, the 10-year Treasury yield declined from roughly 4.3% to just under 4.1%, easing pressure on underwriting assumptions and helping stabilize pricing discussions. At the margin, that move may temper further cap rate expansion even with policy rates unchanged.
News
News to know
CMBS distress rate could reach 15% by year-end: CRED iQ | Commercial Observer, February 9, 2026
The overall distress rate for commercial mortgage-backed securities (CMBS) is projected to reach up to 15% by December 2026. This forecast is driven by persistent refinancing obstacles as loans mature in a high-rate environment with limited monetary policy relief. The distress rate has already climbed significantly, reaching 11.98% in January 2026, a 148% increase since July 2022. Special servicers are adopting more aggressive postures; of the $40.1 billion in specially serviced loans, 39.1% are in foreclosure, signaling that collaborative restructuring options are largely exhausted. Note sales also comprise 18.7% of strategies, as servicers prefer transferring risk to distressed debt investors.
House approves sweeping housing package | Housing Finance, February 9, 2026
The House of Representatives has overwhelmingly passed the Housing for the 21st Century Act (H.R. 6644) in a 390-9 bipartisan vote. Aimed at the national affordability crisis, a central provision increases the public welfare investment (PWI) cap for banks from 15% to 20%. This shift is designed to unlock billions in private-sector capital for affordable housing, particularly through the Low-Income Housing Tax Credit (LIHTC) program. Historical data shows that when the cap was last raised in 2006, national bank PWIs grew from $3.1 billion to $27.9 billion by 2024. Additionally, the bill updates the HOME and CDBG programs and increases FHA multifamily loan limits. The legislation now moves to the Senate, where it must be reconciled with the similar ROAD to Housing Act.
CPI says rents are up. Multifamily owners don't believe it | GlobeSt, February 10, 2026
A growing disconnect is emerging between official inflation data and on-the-ground multifamily performance, as the CPI shows rents up 3.3% over the past two years while many owners report flat to negative effective rent growth once concessions are factored in. During a recent industry webinar, market participants questioned whether the Bureau of Labor Statistics’ rent sampling and heavy reliance on owners’ equivalent rent are overstating shelter inflation, particularly in higher supply Sun Belt markets where rents have softened. If shelter inflation is indeed mismeasured, headline inflation may be running closer to the Fed’s 2% target, implying policy is more restrictive than necessary and increasing the odds of deeper rate cuts. For multifamily investors, the gap complicates underwriting and valuation, as cap rates, financing costs, and risk assessments remain tied to CPI narratives that may not reflect actual rent dynamics at the asset level.
MBA projects 27% increase in commercial mortgage volume for 2026 | Connect CRE, February 11, 2026
The Mortgage Bankers Association forecasts a 27% jump in commercial mortgage originations to $805.5 billion in 2026, up from $633.7 billion in 2025, with multifamily volume rising to $399.2 billion. While GDP growth is expected to slow to 1.9% in 2026 and unemployment tick up to 4.5%, strong refinancing and acquisition activity late in 2025 has built momentum and reduced near-term maturity pressure. Separately, a Treasury and Rates column argues inflation may be stabilizing closer to 3% rather than the Fed’s 2% target, creating tension in bond markets as long-term expectations remain anchored lower. A gradual repricing higher in inflation expectations could push yields up and reshape capital allocation decisions, including across commercial real estate.
Maybe America needs some new cities | New York Times, February 12, 2026
Conor Dougherty contends that as the United States faces a housing shortage of four to seven million units, building new cities from scratch may be more practical than it sounds, citing Irvine as a rare modern success. Largely planned by a single landowner, Irvine integrated housing, jobs, and infrastructure in a coordinated way, creating a diversified employment base and mixed residential stock while avoiding purely piecemeal sprawl. That model has inspired proposals such as Starbase, California Forever, and Telosa, which aim to build walkable, mixed-use communities on undeveloped land. Still, most “new town” efforts have failed due to high infrastructure costs and the challenge of attracting jobs, with few enduring successes beyond projects like The Woodlands. Even so, the article argues that large-scale, master-planned development could play a role in easing supply constraints and reshaping suburban growth.
Trump may ease metal tariffs, offering CRE a breather on build costs | GlobeSt, February 13, 2026
President Donald Trump is preparing to scale back some of the steel and aluminum tariffs imposed last summer, according to sources cited by the Financial Times, potentially easing cost pressures for commercial real estate. The administration is reviewing the broad list of affected products, some of which carry duties as high as 50 percent, and may exempt certain items while shifting toward more targeted national security reviews. For CRE owners, developers, and lenders, any moderation in tariffs could help stabilize construction costs for metal-intensive projects such as industrial facilities, data centers, and big-box retail, where higher input prices have strained feasibility and delayed developments. While relief would not immediately reverse prior cost increases, a clearer and narrower tariff framework could improve underwriting confidence and reduce volatility in project budgets, with modest downstream benefits for consumer-facing tenants as well.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | What the latest lending data tells us about CRE financing
Financing conditions have improved for US CRE borrowers.
Fed data shows easing standards and rising borrower demand. Our Debt Capital Markets Survey shows tighter spreads and increased quote activity. Bank and asset manager earnings calls referenced renewed engagement across property types, including office.
In this episode of CRE Exchange, we walk through the data and how it is showing up across capital markets.
Our research team weighs in | CRE job market rebound
Our own Cole Perry, Associate Director of Research at Altus Group, shared his perspective with Bisnow on why commercial real estate firms are increasing hiring as deal activity picks up.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, February 17
8:30AM: Empire State Manufacturing Survey
Wednesday, February 18
8:30AM: Building Permits and Housing Starts
8:30AM: Durable Goods Orders
8:30AM: Advance Retail and Wholesale Inventories
Thursday, February 19
10:00AM: Pending Home Sales
Friday, February 20
8:30AM: PCE Price Index
9:45AM: S&P Flash Services PMI
9:45AM: S&P Flash Manufacturing PMI
10:00AM: New Home Sales
10:00AM: University of Michigan Consumer Sentiment
Upcoming industry events
February 25-28: CORFAC Spring Conference (New Orleans, LA)
Upcoming Earnings Calls (Times in EST)
Tuesday, February 17, 2026
8:30 AM: Armada Hoffler Properties, Inc. [NYSE:AHH]
11:00 AM: Kite Realty Group Trust [NYSE:KRG]
Wednesday, February 18, 2026
10:00 AM: Community Healthcare Trust Incorporated [NYSE:CHCT]
10:00 AM: Centerspace [NYSE:CSR]
12:00 PM: Empire State Realty Trust, Inc. [NYSE:ESRT]
Thursday, February 19, 2026
8:00 AM: Americold Realty Trust, Inc. [NYSE:COLD]
8:30 AM: Gladstone Commercial Corporation [NASDAQ:GOOD]
10:00 AM: Host Hotels & Resorts, Inc. [NASDAQ:HST]
11:00 AM: Broadstone Net Lease, Inc. [NYSE:BNL]
1:00 PM: Industrial Logistics Properties Trust [NASDAQ:ILPT]
Friday, February 20, 2026
9:00 AM: Lamar Advertising Company [NASDAQ:LAMR]
9:00 AM: CTO Realty Growth, Inc. [NYSE:CTO]
10:00 AM: Gaming and Leisure Properties, Inc. [NASDAQ:GLPI]
11:00 AM: Strawberry Fields REIT, Inc. [NYSEAM:STRW]
12:00 PM: Park Hotels & Resorts Inc. [NYSE:PK]
1:00 PM: Extra Space Storage Inc. [NYSE:EXR]
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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