CRE This Week - What's impacting the United States market?
June 30, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of June 30, 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
Existing Home Sales and New Home Sales
The National Association of Realtors reported on June 23 that existing-home sales rose 0.8% in May to a seasonally adjusted annual rate of 4.03 million. Inventory climbed 6.2% from April and 20.3% year-over-year to 1.54 million units (about a 4.6-month supply) approaching balanced-market conditions.
Separately, the U.S. Census Bureau and HUD reported on June 25 that new single-family home sales dropped 13.7% in May to an annual rate of 623,000, down 6.3% from a year earlier and the slowest pace in nearly a year. The months’ supply of new homes jumped to 9.8, up from 8.3 in April and 8.5 in May 2024.
Ongoing weakness in the for-sale housing market continues to reinforce demand for rentals. Existing-home sales are lower than at any point during the global financial crisis, while new single-family sales fell sharply in May and are stabilizing near pre-pandemic levels. Despite the slowdown, prices continue to rise. The median existing-home price rose 1.3% year-over-year to $422,800 (the smallest gain since mid-2023) while the median new-home price climbed 3.7% on the month and 3.0% year-over-year to $426,600. With affordability still a major hurdle, more households are turning to rental housing, supporting multifamily fundamentals amid a pullback in new construction.
Consumer Confidence Index and Consumer Sentiment Index
On June 24, the Conference Board reported that its Consumer Confidence Index fell 5.4 points to 93.0 in June, down from 98.4 in May, reversing nearly half of the prior month’s gain. The Present Situation Index dropped 6.4 points to 129.1, while the Expectations Index declined 4.6 points to 69.0, remaining well below the 80-point threshold that typically signals recession risk.
Separately, the University of Michigan released its final June reading of the Consumer Sentiment Index on June 27, showing a 16% increase to 60.7. Despite the monthly jump, sentiment remained 18% below its post-election high in December 2024. Short-term inflation expectations declined from 6.6% to 5.0%, while long-run expectations edged down from 4.2% to 4.0%.
The Conference Board’s Consumer Confidence Index captures views on the job market and overall business conditions, while the University of Michigan’s Sentiment Index places more weight on personal finances and inflation. As a result, sentiment is often more reactive to headlines and political developments. In June, confidence declined while sentiment saw a modest rebound, highlighting mixed signals from consumers.
For commercial real estate, this divergence points to a split outlook. Discretionary sectors such as high-end retail and hospitality may face headwinds as concerns about jobs and income dampen spending. In contrast, essential retail and value-oriented formats may prove more resilient, supported by easing inflation expectations and a slightly improved consumer mood
On Friday, June 27, the BEA published the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of inflation for May 2025. The May 2025 PCE Price Index showed headline inflation rising just 0.1% month-over-month and 2.3% year-over-year, while core PCE (excludes food and energy) climbed 0.2% monthly and 2.7% annually.
The May inflation numbers, headline and core, were both slightly above expectations and were still generally inline with recent trend. May’s data did not reflect the resurgence in pricing pressures that some economists and analysts feared be a result of companies and importers passing on the higher costs of tariffs to consumers. While the current rate of inflation remains above the Fed’s 2% target range on a year-on-year basis, annualized month-on-month changes is much closer to the central bank’s target and potentially supportive of a summer-time rate cut.
Q1 2025 U.S. GDP (Third Estimate)
The Bureau of Economic Analysis (BEA) released the third estimate of Q1 Gross Domestic Product (GDP) on June 26. The latest estimate showed real GDP decreasing at an annual rate of 0.5 percent, a revision of 0.3 percent from the prior estimate which was driven by lower consumer spending and exports, though was partially offset by a revised lower import estimate. While reflective of overall economic contraction, the latest estimate of US real growth is a much more modest contraction than many forecasts had anticipated.
Following the national release, BEA released state level real GDP data on July 27. First quarter real GDP decreased across all but 11 states. Annual rates of real growth ranged widely across states, from +1.7 percent in South Carolina to -6.1 percent in Iowa and Nebraska. However, the real estate industry (including real estate, rental, and leasing activities) were a growth driver, increasing across all 50 states. At the national level, the real estate industry increased at a 2.72 percent annual growth rate - the highest rate of growth and first time growth has been above the long-term average annual growth rate (2.39 percent) since Q1 2023. Taken together, the GDP data shows that the US economic machine is showing some signs of cooling, but far from the precipitous drop many feared, and reflect some improvements across the real estate industry. However, what will be important to watch is how the Q2 data evolve, as they will capture more of the impact from tariff talk disruptions.
News
News to know
America’s biggest cement supplier set to make its market debut | Wall Street Journal, June 23, 2025
Amrize, the North American spinoff of Swiss cement giant Holcim, began trading this week and is expected to debut with a market capitalization above $30 billion, per Dealogic. As the largest cement supplier in North America and the second-largest commercial roofing provider, Amrize stands to benefit from tariffs because it sources most of its materials domestically. Analysts note the company is well positioned for long-term growth despite near-term headwinds in homebuilding and commercial construction, with infrastructure spending and refurbishment activity driving demand. Nearly half of Amrize’s business comes from repair and retrofit work, and CEO Jan Jenisch said the company is exploring new deals as it capitalizes on the U.S. manufacturing push.
CRE lenders face unprecedented challenges as debt grows | GlobeSt, June 24, 2025
The commercial real estate lending sector is facing mounting stress from a convergence of challenges far beyond the typical “perfect storm.” High borrowing costs and a wave of loan maturities are driving distress levels to a decade high, with $116 billion in troubled debt as of Q1 2025, per MSCI Real Capital Analytics. Banks are resorting to extend-and-pretend strategies, while delinquencies and nonaccrual rates hit their highest level since 2014, according to the FDIC. Policy uncertainty, tariff-driven inflation, and new tax threats like the section 899 “revenge tax” further cloud the outlook. Systemic risks are also rising as banks remain indirectly exposed to real estate through their lending to nonbank financial players like REITs and private funds, deepening vulnerabilities across the financial system.
Seniors increasingly opting to rent while young people wait | GlobeSt, June 24, 2025
There’s been a notable increase in seniors choosing to rent rather than own, driven by lifestyle flexibility and housing market uncertainty. Meanwhile, many younger adults are delaying homeownership due to high prices and interest rates. This dual dynamic is reshaping rental demand, particularly for multifamily units catering to seniors. Developers and investors may need to rethink product design and location strategies as older renters play a bigger role in the market.
Mamdani’s rent-freeze agenda sparks slide in NYC-linked REITs | Bloomberg, June 25, 2025
Shares of NYC-focused REITs slid after Zohran Mamdani emerged as the likely Democratic mayoral nominee, campaigning on a rent freeze and progressive tax-funded policies. Real estate was the worst-performing S&P 500 sector Wednesday, with multifamily REITs like AvalonBay and Equity Residential falling sharply and Vornado Realty Trust down over 6%. Analysts flagged concerns that Mamdani’s platform could deter investment, drive out affluent residents, and pressure rent-stabilized landlords, potentially increasing defaults and hurting banks with NYC real estate exposure. A final runoff is set for July 1, with policy shifts possible ahead of the November general election.
Blackstone has acquired another $2 billion in discounted commercial real estate loans, bringing its total to $20 billion over the past two years. The latest batch, purchased at about a 7% discount from Atlantic Union Bankshares, includes performing loans backed by apartment buildings and neighborhood retail properties. The discount reflects lower valuations tied to loans originated before the recent surge in interest rates. Blackstone’s continued appetite for CRE debt highlights growing investor interest in distressed and discounted assets as banks offload exposure.
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Important dates
Upcoming data releases and events
Data releases (Times in EST)
Tuesday, July 1
9:45AM: S&P Manufacturing PMI, Data Release
10:00AM: Construction Spending, Data Release
10:00AM: Job Openings, Data Release
Wednesday, July 2
8:15AM: ADP Employment, Data Release
Thursday, July 3
8:30AM: Employment Report, Data Release
8:30AM: U.S. Trade Deficit, Data Release
10:00AM: Factory Orders, Data Release
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.
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