CRE This Week - What's impacting the United States market?
January 12, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of January 12, 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
S&P Global US Services PMI and ISM Services PMI
Both of the key purchasing managers indexes showed signs of ongoing expansion through December 2025. Released on January 6, S&P Global US Services PMI registered 52.5 in December, albeit at a slower pace of growth than in prior months and forecasts. The next day's ISM Services PMI rose to 54.4% in December, marking expansion for the third consecutive month and suggesting that service-sector activity strengthened late in 2025, and contrary to the S&P data, reflected the pace of activity picking up. Together, both indicators signal expanding economic activity, amidst still elevated pricing pressure.
While both of these metrics cover similar areas of the economy and are used to gauge service sector health, they do differ in terms of how they are calculated and their sector coverage, so they can send different signals at times. However, with both showing signs of expansion, this can be seen as a clearer sign of robust economic activity. Continued service sector expansion underpins occupancy fundamentals in office sectors clustered around business services and supports hospitality ADR and occupancy. If the slowing momentum seen in the S&P release persists, however, this may translate to CRE as tempered leasing velocity and rent growth expectations, especially in sectors sensitive to consumer spending (e.g., urban retail). Meanwhile, the ISM release highlighted the ongoing pricing pressures, which may put pressure on margins for both CRE tenants and owners.
ADP Employment, Job Openings and Labor Turnover Survey, and the December Employment Report
The U.S. Bureau of Labor Statistics’ JOLTS report for November 2025, released on January 7, 2026, showed that total nonfarm job openings were little changed at about 7.1 million on the last business day of the month, down by roughly 885,000 from November 2024, with the job openings rate at 4.3 percent. In November, total hires were about 5.1 million and total separations were also around 5.1 million, including quits near 3.2 million and layoffs/discharges at about 1.7 million, all broadly stable on the month.
The ADP National Employment Report for December 2025, released Jan 7, 2026, showed that private-sector employment increased by 41,000 jobs in December 2025, marking a rebound from a revised 29,000-job decline in November. The report also found that annual pay growth for job-stayers was up about 4.4 percent year-over-year in December, with pay increases for job-changers (+6.6 percent) accelerating compared with November.
The Bureau of Labor Statistics released the December 2025 Employment Report on January 9, 2026, showing that employers added only 50,000 jobs, well below expectations and marking another month of sluggish hiring to close out a weak 2025 employment year. Despite the modest job gain, the unemployment rate ticked down to 4.4%, slightly better than forecasts, underscoring a labor market that remains stable even as hiring momentum slows. Payroll gains were concentrated in sectors such as health care and hospitality, while industries like retail, manufacturing, and construction shed jobs or saw little growth. Additionally, revisions to prior months’ data trimmed job totals, highlighting that 2025 recorded the slowest annual job growth in many years.
Taken together, the latest JOLTS, ADP, and December employment data point to a labor market that is still cooling but not breaking. Job openings and hiring have slowed meaningfully over the past year, yet quits and layoffs remain contained, suggesting firms are scaling back hiring plans rather than cutting staff outright. Wage growth is still elevated, especially for job-changers, but appears to be moderating. For the broader economy, this supports a soft-landing narrative: growth is losing momentum, labor-driven inflation pressures are easing, and the data strengthen the case for eventual Fed rate cuts later in 2026, even as policymakers remain cautious.
For commercial real estate, this backdrop implies slower demand growth rather than a sharp deterioration. Softer hiring in professional services, retail, manufacturing, and construction will continue to weigh on leasing and tenant expansion, while gains in healthcare and hospitality offer only a partial offset. At the same time, the absence of widespread layoffs limits downside risk to occupancy and rent collections, particularly in multifamily and necessity-based retail. From a capital markets perspective, a cooling labor market supports the outlook for lower borrowing costs over time, which could help unlock stalled refinancings and transaction activity.
Building Permits, Starts, and Completions
The U.S. Census Bureau released the New Residential Construction report for October 2025 on January 9, 2026, showing continued moderation in housing activity, led by multifamily. Total building permits declined 1.5% month over month to a seasonally adjusted annual rate of 1.41 million units, and were about 3% lower than a year earlier. Multifamily permits (five units or more) fell more sharply, down roughly 4% on the month to around 480,000 units, and were down more than 10% year over year. Housing starts dropped 4.3% month over month to approximately 1.25 million units, with multifamily starts down about 8% to roughly 350,000 units. Completions remained elevated but are clearly easing, slipping 1.8% on the month to about 1.39 million units, with multifamily completions near 365,000, still up modestly from a year ago as projects from the prior construction cycle continue to deliver.
The pullback in multifamily permits and starts points to continued weakness in residential investment, which is likely to remain a drag on GDP and construction employment into early 2026 as higher rates and tighter credit weigh on new projects. Elevated completions largely reflect momentum from prior development decisions rather than renewed confidence.
For commercial real estate, the data suggest the multifamily supply cycle is turning. Near-term deliveries will continue to pressure rents and concessions in heavily built markets, but the sharp slowdown in new starts indicates the pipeline is thinning quickly. As that supply wave moves through, fundamentals should gradually rebalance, improving the medium-term outlook for rents, occupancy, and values in markets where demand remains resilient.
News
News to know
Global CRE's biggest 2026 stress tests are already on the calendar | Bisnow, January 5, 2026
Commercial real estate enters 2026 facing a year defined by scheduled policy decisions rather than unexpected shocks. Federal Reserve meetings will anchor expectations for borrowing costs and credit availability as rates are likely to ease slowly, keeping underwriting conservative and deal activity selective. A series of global and domestic milestones, including central bank signaling abroad, IMF and World Bank meetings, major international events, US tax deadlines, Opportunity Zone timelines, regulatory scrutiny, and the midterm elections, will shape capital flows, permitting, and investment incentives. Together, these known pressure points point to a year of gradual repricing and uneven opportunity, where disciplined timing and careful planning around the calendar matter more than betting on a swift macro turnaround.
Welltower Inc. overtook Prologis Inc. in 2025 to become the largest US equity REIT by market capitalization, reflecting a sharp rotation toward healthcare real estate. Welltower closed the year with a market cap of $127.4 billion, up more than 60 percent year over year, while Prologis finished second at $118.6 billion. The shift pushed healthcare past industrial as the largest REIT sector overall, with aggregate market capitalization of $227.5 billion. Other healthcare REITs also saw outsized gains, including Ventas Inc. and Omega Healthcare Investors Inc., while several multifamily REITs posted double-digit declines in market value. By contrast, data center-focused Equinix Inc. slipped in the rankings, and Iron Mountain Inc. recorded the steepest drop among the top 25 REITs. Despite these shifts, real estate remained the smallest sector in the S&P 500 by market capitalization at year's end, underscoring how concentrated investor gains were within select property types rather than across the broader equity market.
Apartment investors confront a narrow but intense concessions problem | GlobeSt, January 6, 2026
Apartment owners leaned more heavily on concessions in November, but the pressure was concentrated in a limited set of markets rather than signaling broad distress. RealPage data show that 16 percent of stabilized apartments nationwide offered concessions, with average discounts reaching 10.2 percent, the highest level since September 2024, driven largely by supply-heavy Sun Belt and Western metros such as Austin, San Antonio, Denver, Phoenix, and Nashville. Concessions were most prevalent in the South and West Coast and more common in Class A and Class C products, while Class B assets remained less aggressive. RealPage frames this as a market-specific response to elevated new supply and shifting demand, with owners using targeted discounts to protect occupancy, which remains just below 95 percent nationally, rather than cutting face rents more deeply. For investors, the takeaway is the importance of focusing on effective rents, as markets with strong long-term demand may still require patience on revenue growth until excess supply is absorbed and concession packages unwind.
The smart money has company now in commercial real estate | Commercial Observer, January 6, 2026
Capital is flowing back into commercial real estate as pricing resets, underwriting improves, and years of muted construction create new opportunities, particularly in private markets. Surveys from PricewaterhouseCoopers show family offices increasing real estate allocations, while more stable interest rates are narrowing bid-ask gaps and easing deal underwriting. Debt markets are also reaccelerating: CBRE reports a sharp rise in lending momentum driven by permanent loans, Cushman & Wakefield points to steady growth in private CRE capital, and CMBS activity has rebounded, with Fitch Ratings highlighting resilient CRE CLO issuance. While optimism has returned, capital deployment remains selective, focused on assets repriced to current conditions rather than indiscriminate risk taking.
Washington, D.C., is emerging as one of the nation’s leading markets for office-to-residential conversions as elevated vacancies and a housing shortage reshape redevelopment strategies. More than 6,500 apartment units are in the pipeline from planned conversions, second only to New York City, driven by the district’s large stock of obsolete office buildings and supportive local incentives. High financing and design hurdles mean conversions are not viable for every property, but alternative capital sources such as C-PACE are helping some large projects move forward. The severity of the office downturn has made conversions a central component of the recovery strategy in Washington, D.C..
Trump targets institutional purchases of single-family homes | Bloomberg, January 7, 2026
President Donald Trump said he plans to push for a ban on institutional investors buying single-family homes as part of a broader effort to address housing affordability, arguing that homes should be owned by people rather than corporations and saying he would ask Congress to codify the move. The announcement comes amid a prolonged housing supply shortage that has driven prices sharply higher, with the S&P Case-Shiller 20-City Composite Home Price Index up roughly 68% since January 2020. While investors of all sizes accounted for about 30% of single-family purchases in early 2025, large institutional owners still control only a small share of the nation’s single-family rental stock. Trump said he plans to discuss the proposal, alongside other cost-of-living initiatives, during remarks at the World Economic Forum later this month.
President Donald Trump said his administration would direct Fannie Mae and Freddie Mac to purchase up to $200 billion in mortgage-backed securities, a move aimed at lowering mortgage rates and easing housing affordability pressures. The proposal would significantly expand the agencies’ retained portfolios, which have room to grow under current caps, though few details have been provided on timing or execution. Housing advocates say renewed bond purchases could push mortgage rates down by roughly 25 basis points or more, but critics note the strategy echoes pre–financial crisis practices that amplified risk. The announcement comes as home prices remain more than 50% above 2019 levels and mortgage rates hover above 6%, and as the administration weighs broader housing interventions, including limits on investor purchases of single-family homes and a potential public offering of the government-sponsored enterprises overseen by the Federal Housing Finance Agency.
Sector hot spots emerge for CMBS default risk in 2026 | ConnectCRE, January 8, 2026
According to Trepp, CMBS delinquency rates moved higher through 2025 and are expected to remain range-bound in 2026, as strong issuance continues to offset rising volumes of distressed loans. Overall, CMBS delinquency ended 2025 at 7.30%, with stress most pronounced in office, where delinquency peaked at an all-time high of 11.76% before closing the year at 11.31%. Multifamily delinquencies also climbed, reaching 6.64% by year-end. Looking ahead, refinancing risk remains a key concern, particularly among the roughly $13.7 billion of office loans maturing in 2026, including $2.4 billion backed by properties with DSCRs at or below 1.09x. Retail CMBS shows a more mixed picture, with an overall delinquency rate of 7.06% but significantly higher stress in malls at 11.2%, while the hotel sector faces added pressure from rate exposure, as nearly 70% of maturing hotel CMBS debt is floating-rate, and low-coupon fixed-rate loans may struggle to refinance in a higher-rate environment.
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, January 13
6:00AM: NFIB Small Business Optimism Index
8:30AM: Consumer Price Index
10:00AM: New Home Sales
Wednesday, January 14
8:30AM: Retail Sales
8:30AM: Producer Price Index
10:00AM: Existing Home Sales
Thursday, January 15
8:30AM: Empire State Manufacturing Survey
8:30AM: Philadelphia Fed’s Manufacturing Survey
Friday, January 16
9:15AM: Industrial Production
Upcoming industry events
January 11 – January 14 : CRE Finance Council (Miami, FL)
January 25 – January 28: BOMA National Issues Conference (Washington, DC)
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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