CRE This Week - What's impacting the United States market?
April 28, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of April 28, 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
New Home Sales and Existing Home Sales
The U.S. Census Bureau and the Department of Housing and Urban Development released data on sales of new single-family homes for March 2025 on April 23. Sales of new single-family home sales rose to a seasonally adjusted annual rate of 724,000, up 7.4% from February and 6.0% year-over-year. Inventory ticked slightly higher to 503,000 homes, representing 8.3 months of supply. While volumes improved, pricing softened: the median new home price fell 1.9% month-over-month and 7.5% year-over-year to $403,600.
The National Association of Realtors released data on sales of existing single-family homes for March 2025 on April 24. Sales slipped 5.9% month-over-month and 2.4% year-over-year to a seasonally adjusted annual rate of 4.02 million. Inventory rose 8.1% month-over-month to 1.33 million, representing 4.0 months of supply. The median price of an existing home climbed 2.7% annually to $407,000, the 21st month of consecutive increases.
The March housing data paints a mixed picture: new home sales showed signs of resilience while existing-home sales continued to retreat. The divergence suggests that affordability pressures and limited resale inventory are keeping a floor under demand for new homes and rental housing, a dynamic supportive of longer-term fundamentals for the multifamily sector.
The U.S. Census Bureau released its Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders for March 2025 on April 24. Orders for durable goods rose 9.2% month-over-month and 11.9% year-over-year in March, driven by non-defense aircraft orders. However, excluding transportation, durable goods orders were flat month-over-month as businesses began to exercise caution ahead of tariffs.
Underlying industrial momentum is showing signs of fatigue, particularly in electronics, machinery, and core capital goods. For commercial real estate, this hints at potential softening in industrial space demand as Q2 unfolds. Recent warehouse expansion tied to reshoring and inventory buildup may pause if manufacturers start pulling back capital investment due to trade uncertainty and waning orders. Owners of logistics facilities tied to high-tech manufacturing or export hubs should watch closely, as sector performance could diverge based on tenant mix and exposure to global supply chains.
The University of Michigan released final index of consumer sentiment for April on April 25. The index declined 8% month-over-month to 52.2, only a slight improvement from April’s initial readout of 50.8. The reading is the fourth lowest in the history of the dataset. Respondents expect prices to increase 6.5% over the next year, the highest since 1981. Long-run inflation expectations over the next 5-10 years reached 4.4%, the highest since 1991.
One of the first major sentiment indexes for April shows growing consumer pessimism. 44% of Americans now believe they’ll be worse off a year from now. Weaker labor market expectations and concerns about rising prices are leading households to brace for lower real incomes. This will likely immediately weigh on retail foot traffic and hospitality demand, a potential double hit given that international visits to the U.S. are also declining. CRE professionals should expect possible bifurcation across markets and asset types as these headwinds play out.
News
News to know
Developers delay billions in projects amid mounting uncertainty | Construction Dive | April 21, 2025
Mounting uncertainty around tariffs, tax credits, and federal loan approvals is causing developers to pull back from billions of dollars in construction projects, particularly in clean energy and tech manufacturing. While a few companies like JCB and Novartis are expanding their U.S. footprints, most firms are canceling or delaying plans due to unstable policy conditions. Sectors hit hardest include electric vehicle and battery manufacturing, where project cancellations surged in early 2025. Construction inputs are increasingly tangled in overlapping trade rules, forcing contractors to rethink procurement strategies. Developers and contractors are urged to stay flexible, as trade policies remain volatile and financing conditions continue to shift.
Federal office lease reductions slow sharply in March | GlobeSt | April 22, 2025
The pace of federal office lease reductions slowed sharply in March, with the General Services Administration cutting about 503,000 square feet of space and trimming $11.5 million from annual rent costs, according to Trepp. This marked a major slowdown from February, when reductions were much larger. While some markets like New York, San Diego, and Washington, D.C. saw selective expansions, consolidation efforts continued elsewhere. Conflicting data from different sources has made it difficult to gauge the full extent of lease terminations and cost savings. Overall, the federal government’s annual rent bill now stands at $5.23 billion, and ongoing cuts are expected through the middle of the year.
Why Florida’s condo owners are so desperate to sell | Wall Street Journal | April 23, 2025
Florida’s condominium market is under growing pressure as skyrocketing insurance premiums, special assessments, and tougher financing hurdles push many owners to sell. Although condo prices in parts of South Florida have continued to rise, statewide values have generally declined, particularly for older buildings facing costly structural upgrades after new safety regulations were introduced following the 2021 Surfside collapse. Many properties have landed on Fannie Mae’s restricted lending list, making it even harder for buyers to secure mortgages. Legislative efforts are underway to ease the financial strain, but for many owners, the market downturn has already led to significant financial losses and forced sales at steep discounts.
San Francisco’s office market entered 2025 with mixed signals, according to CommercialEdge data. Although the city continued to report the highest office vacancy rate in the country at 27.8 percent, other indicators showed improvement compared to early 2024. Leasing activity picked up with major deals like JPMorgan Chase’s expansion and Chan Zuckerberg Institute’s large biosciences lease. Construction remained active, giving San Francisco the third-largest office pipeline nationally, even as new project starts slowed. Investment sales rose sharply year-over-year, though discount pricing trends persisted. The city’s high office costs kept it among the most expensive markets in the country. Meanwhile, office-to-residential conversions gained momentum under new city programs, and coworking space expanded, with WeWork leading the market.
CREFC Sentiment Index takes sharp negative turn | ConnectCRE | April 24, 2025
The CRE Finance Council’s latest Board of Governors survey showed a sharp deterioration in industry sentiment, with its First-Quarter 2025 Sentiment Index dropping 30.5 percent to 87.9, marking the second-steepest decline on record and the first time it has fallen below 100 since early 2020. Much of the decline is tied to growing fears around economic instability and volatile market conditions fueled by new trade measures. A large majority of respondents, 80 percent, now expect weaker economic conditions over the next year, and concerns about government actions rose sharply. Expectations for commercial real estate performance also turned more pessimistic. CREFC President Lisa Pendergast noted that while the headline figures point to significant worry, some remain hopeful that lower interest rates could revive transaction activity after a prolonged slowdown.
Neumann’s Flow more than doubles valuation, eyes eventual IPO | Bloomberg | April 24, 2025
Adam Neumann’s residential real estate startup, Flow, has raised over $100 million in new funding, bringing its valuation to about $2.5 billion. Backed by investors including a16z, Flow operates apartment properties in cities like Fort Lauderdale and Miami, along with activities in Saudi Arabia, and recently expanded into office-sharing under the Workflow brand. Company executives expect Flow to achieve positive cash flow in 2025, and Neumann has hinted at a future IPO, although there is no set timeline. Flow’s latest funding round also increased a16z’s ownership stake to 25 percent.
Research Spotlight
Catch the latest insights from the Altus team
Spencer Burton, CEO and co-founder of CRE Agents, joins us to explore how AI is transforming the way CRE professionals work. From eliminating repetitive tasks to enabling smarter, faster decision-making, Spencer shares how digital coworkers are already creating a multiplier effect for their human counterparts in the industry.
In conversation with our host, Omar Eltorai, they discuss strategies for adopting AI without overhauling your entire operation, and why building reflexive AI usage habits now will give both professionals and firms an edge in the years ahead.
Tune in if you’re looking to work smarter, move faster, and stay competitive
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, April 29
8:30AM: Advance Wholesale Inventories, Data Release
9:00AM: S&P Case-Shiller Home Price Index, Data Release
10:00AM: Consumer Confidence, Data Release
10:00AM: Job Openings, Data Release
Wednesday, April 30
8:15AM: ADP Employment, Data Release
8:30AM: PCE Price Index, Data Release
10:00AM: Pending Home Sales, Data Release
Thursday, May 1
10:00AM: Construction Spending, Data Release
Friday, May 2
8:30AM: Employment Report, Data Release
Upcoming Industry Events
May 12 – May 14: ULI Spring Meeting
May 13 – May 14: RERI Annual Conference
May 18 – May 20: ICSC Las Vegas
May 18 – May 21: MBA Secondary and Capital Markets Conference
May 18 – May 21: MBA CRE Finance and Technology Conference
May 30 – May 31: AREUEA National Conference
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.
