CRE This Week - What's impacting the United States market?
December 22, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of December 22, 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.
Quick note: Our December 22nd edition will be our last newsletter for 2025, we'll be taking a break for the holidays, but CRE This Week will return January 12, 2026!
Economic print
Macro economic factors impacting CRE
Home Builder Confidence and Existing Home Sales
The National Association of Home Builders released the NAHB/Wells Fargo Housing Market Index (HMI) for December on December 16. The headline index rose one point to 39, its highest level in eight months but still well below the 50 threshold that signals positive builder sentiment. This marks the 20th consecutive month the index has remained in contractionary territory. Within the survey, current single-family sales conditions increased to 42, future sales expectations rose to 52, and prospective buyer traffic remained weak at 26. Builder incentives remain widespread, with 67% reporting sales incentives and 40% reporting price cuts.
Separately, the National Association of Realtors reported on December 19 that existing-home sales increased 0.5% month-over-month in November to a seasonally adjusted annual rate of 4.13 million, marking a third straight monthly gain. Inventory declined 5.9% from October to 1.43 million homes, equivalent to a 4.2-month supply. Despite the monthly improvement, sales were still down 1.0% year-over-year, while the median existing-home price rose 1.2%. NAR also noted that wage growth continues to outpace home price appreciation, gradually improving affordability even as borrowing costs remain elevated.
The modest uptick in builder confidence points to stabilization in single-family construction sentiment, but conditions remain constrained by high borrowing costs, affordability challenges, and cautious consumer behavior. Elevated use of incentives and price cuts suggests builders are still working to clear inventory rather than signaling a meaningful rebound in demand. At the same time, the fact that wage growth is running ahead of home price gains provides a constructive medium-term signal for housing affordability, particularly if mortgage rates continue to ease.
For multifamily, the implications are mixed but generally supportive. Sluggish single-family activity and limited resale inventory continue to push households toward renting. However, muted builder sentiment also reflects broader caution around household formation and mobility, which could cap upside in absorption growth. Overall, the housing market appears to be stabilizing rather than reaccelerating, a backdrop that supports steady multifamily fundamentals but argues against a rapid demand-driven upswing.
After delays caused by the federal government shutdown, the U.S. Bureau of Labor Statistics released the November Employment Situation on December 16, showing the economy added 64,000 jobs. That modest gain followed a 105,000-job loss in October, largely driven by reductions in the federal workforce. As a result, total nonfarm payrolls have seen little net change since April, with most job growth concentrated in non-cyclical sectors such as healthcare. The unemployment rate rose to 4.6 percent, the highest level in several years, while average hourly earnings increased 3.5 percent year over year, marking the slowest pace of wage growth in more than four years.
Taken together, subdued hiring, rising unemployment, and easing wage pressures point to a softening labor market. While this dynamic may help relieve some inflationary pressure, it also weighs on the demand side of commercial real estate. Higher unemployment and more volatile hiring patterns can dampen consumer spending and slow space absorption, particularly in sectors tied to discretionary demand. The labor market has therefore become a central focus for policymakers as the Federal Reserve weighs weakening labor conditions against still-sticky inflation in determining the path of interest rates.
Retail Sales and Consumer Sentiment
The U.S. Census Bureau released the Advance Monthly Retail Trade Report for October on December 16, following delays tied to the federal government shutdown. Total retail and food service sales were effectively flat month-over-month but rose 3.5% year-over-year to a seasonally adjusted annual rate of $732.6 billion. Excluding automobiles, sales increased 0.5% from the prior month, pointing to some underlying resilience outside of big-ticket purchases. Performance varied by category, with non-store retail sales, largely e-commerce, up 9.0% year-over-year, while food services and drinking places rose 4.0% year-over-year, marking their slowest annual growth since February 2025.
Separately, the University of Michigan released its final Consumer Sentiment Index for December on December 19. The headline index edged up to 52.9, slightly below the mid-month reading of 53.3 but above November’s 51. Sentiment improved among lower-income households but was unchanged for higher-income consumers. The current conditions index slipped modestly from 51.1 to 50.4, while expectations improved meaningfully, rising to 54.6 from 51.0. Outside the headline index, 63% of respondents said they expect unemployment to rise over the next year. Year-ahead inflation expectations fell to 4.3%, the lowest reading in 11 months, but remain well above the roughly 3.3% level seen at the start of 2025.
Taken together, the data suggest consumer spending was already losing momentum heading into the holiday season, even before accounting for potential disruptions from labor market uncertainty. While headline retail sales were flat, strength in e-commerce and continued growth in food service spending point to a consumer that is still spending but doing so more selectively and with a greater focus on convenience and experiences. At the same time, sentiment remains historically depressed, highlighting a growing disconnect between how consumers say they feel and how they are actually behaving.
For commercial real estate, this mix has uneven implications. Growth in non-store retail may support demand for last-mile logistics and urban infill industrial assets, while steady, if slowing, gains in food service spending favor well-located, experiential, and mixed-use retail concepts. However, elevated expectations for rising unemployment and still-high inflation concerns suggest downside risks to discretionary spending in 2026. If softer sentiment eventually translates into weaker consumption, retail and other consumer-facing property types could face more pressure, making upcoming retail sales releases critical for gauging whether spending resilience can persist.
The U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) for November 2025 on December 18, showing headline CPI at +2.7% year-over-year and core CPI at +2.6%, both softer than economists had forecasted. That said, many economists are urging caution that due to the federal government shutdown, which prevented the Bureau of Labor Statistics from collecting CPI data for October, there are significant gaps, forcing estimation in several components. As a result, month-to-month comparisons are less reliable than usual, even if the year-over-year trend points clearly toward cooling inflation.
Beneath the noisy data, one important development is that rent is now anchoring inflation lower. Rent inflation has fallen below 3% for the first time since the pandemic, and excluding that period, the first time since 2014, driven by a historic wave of apartment supply that has pushed availability well above recent demand highs. Because shelter accounts for nearly one-third of CPI and is measured with a significant lag, cooling rent is likely to limit any near-term re-acceleration in inflation, even if other categories reheat. This may strengthen the case for additional rate cuts in 2026 and reduces the risk of renewed rate volatility, providing a more stable backdrop for refinancing and transaction activity.
News
News to know
Looking back at 2025 | Commercial Observer, December 14, 2025
Commercial Observer’s year-end review points to a stronger-than-expected 2025 for commercial real estate, led by a sharp rebound in New York office leasing and renewed capital markets activity. Several major leases exceeded 500,000 square feet, with two topping 1 million, while investment sales thawed as RXR’s $1.08 billion purchase of 590 Madison Avenue marked the first NYC office trade above $1 billion in years. CMBS issuance also returned in force, financing large office, data center, and retail assets, as price discovery and valuation resets helped bring investors back despite ongoing uncertainty around rates, tariffs, and politics.
San Francisco, New York City lead office comeback: Transwestern | Connect CRE, December 15, 2025
San Francisco and New York City are spearheading the national office market recovery, according to a new report from Transwestern titled "The Giants Awaken." New York has recorded five consecutive quarters of strong market fundamentals, characterized by robust absorption and a sharp decrease in sublease availability. Similarly, San Francisco is seeing a resurgence, with increased leasing activity and higher foot traffic breathing life back into the downtown area. The report credits new local leadership and a return-to-office momentum for driving these improvements in both gateway markets.
Hackman Capital Partners, a major owner of studio soundstages, is facing significant headwinds due to a drastic slowdown in the streaming industry and production cuts. The firm is dealing with high vacancy rates and is restructuring debt, including a $1.1 billion loan on the Radford Studio Center. Potential industry consolidation, such as a merger involving Warner Bros. Discovery, threatens to further reduce demand for leased space as studios may prioritize their own facilities.
Record renewals set the tone for 2026 multifamily performance | GlobeSt, December 16, 2025
LeaseLock Chief Economist Greg Willett expects multifamily performance to improve modestly in 2026 rather than slip into distress, driven by record-high renewal rates as renters choose to stay put amid economic uncertainty and an unfavorable buy versus rent calculus. Occupancy remains solid around 94% to 95% despite affordability pressures, while move-in rents are down slightly year over year and concessions remain widespread, often masking softer effective rents. Willett’s outlook calls for roughly 2% rent growth in 2026, with gains likely skewed to the second half of the year as operators prioritize retention early on and Sun Belt markets stabilize as new supply pressure eases.
Deloitte executive tapped to lead Freddie Mac | Bisnow, December 17, 2025
Kenny Smith, a longtime Deloitte executive with more than 25 years of consulting experience, has been named CEO of Freddie Mac and will also join the agency’s board. Smith most recently led Deloitte’s government and public services customer practice and takes the role as Freddie Mac and Fannie Mae face heightened scrutiny and leadership turnover under Federal Housing Finance Agency Director Bill Pulte. His appointment comes amid growing expectations that the White House may loosen federal oversight of the government-sponsored enterprises and potentially pursue partial privatization through public share sales, a shift that could have important implications for housing finance and mortgage markets.
A bit up, a bit down: Manufacturing’s mixed bag | Commercial Property Executive, December 18, 2025
U.S. manufacturing investment delivered a mixed signal in 2025, according to Savills Research, with new project announcements holding up even as a growing share of projects stalled or were reworked. Policy shifts redirected activity away from EV and clean energy projects toward aerospace and defense, grid and energy, and digital infrastructure, which together accounted for about three quarters of new manufacturing projects and nearly half of announced jobs. While more than 53,000 manufacturing jobs were announced over the past year, that figure remains well below 2022 levels and stalled projects are running far above historical averages, highlighting uneven follow through despite continued concentration of activity in Sun Belt and Southeast markets.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Multifamily myth busting, data, and what actually matters
The biggest risk in multifamily right now isn’t oversupply, it’s misunderstanding the data. Jay Parsons joins CRE Exchange to discuss where public housing datasets fall short, why headline narratives around supply, rents, and defaults spread so quickly, and how investors should interpret conflicting signals as the market moves into its next phase.
Article | Investors revisit US malls amid mixed consumer signals
Despite historically low consumer sentiment, US retail spending is still growing and retail CRE investors are acting like it matters. In 2025, 38 single-asset US mall trades occurred in just the first three quarters matching all of 2024, with over 50 on track by year-end. That ~4.9% turnover rate would be among the highest in 25+ years.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, December 23
8:30AM: Q3 2025 GDP (delayed)
8:30AM: Durable Goods Orders (delayed)
10:00AM: Consumer Confidence
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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