CRE This Week - What's impacting the United States market?
January 26, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of January 26, 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
The U.S. Census Bureau released the Value of Construction Put in Place report for October 2025 on January 20, 2026. Total U.S. construction spending rose modestly to a seasonally adjusted annual rate of $2.175 trillion, up 0.5 percent from September, but activity remained slightly below year-ago levels, down about 1 percent from October 2024. Residential construction totaled $926 billion, down 1.2 percent year-over-year, while total non-residential spending reached $1.25 trillion, down 0.8 percent from a year earlier. This marked a continued period of annual declines in nonresidential activity that began in November 2024.
Private non-residential construction spending totaled $737 billion in October, down 2.6 percent from the same period last year, extending a contraction that began in September 2024. Manufacturing led the decline, falling 9.7 percent year-over-year, followed by lodging, down 3.2 percent. Office construction was a notable outlier, posting a modest 0.5 percent annual increase. Private commercial construction, including warehouse and retail, declined 3.2 percent from a year earlier.
Q3 2025 GDP (Updated Estimate)
The Bureau of Economic Analysis released its updated estimate of third-quarter 2025 GDP on January 22, showing real GDP grew at a 4.4% annualized rate, a slight upward revision from the prior estimate and an acceleration from Q2. Growth was supported by stronger exports, solid consumer spending, and an increase in business investment, while imports declined and were a smaller drag on the headline number. Government spending also contributed modestly. Taken together, the revision confirms that economic growth in Q3 was broad-based and materially stronger than earlier in the year.
The stronger Q3 GDP print suggests the economy entered late 2025 with solid momentum, reducing near-term pressure on the Federal Reserve to cut rates and keeping financing conditions relatively tight. For commercial real estate, this supports underlying tenant demand in sectors tied to consumption and business investment, but elevated borrowing costs and tariff-related cost pressures continue to limit deal activity and new development. As a result, capital remains selective, with greater emphasis on cash flow durability and credit quality rather than broad-based pricing gains.
The National Association of Realtors released the Pending Home Sales Index for December 2025 on January 21, 2026, reporting a sharp monthly drop of 9.3%, reversing November’s gains. Contract signings were also down 3.0% from the same month a year prior. All four regions in the US saw declines, with the Midwest and West seeing the steepest.
The renewed pullback in pending home sales reinforces signs that housing demand remains fragile, even after brief relief from mortgage rate volatility. Because pending sales lead existing home closings by one to two months, the data points to continued softness in residential transaction activity early in 2026, limiting turnover and housing-related consumer spending. For the broader economy, housing is unlikely to provide much near-term growth support. For commercial real estate, weaker home sales continue to support rental demand at the margin, particularly in multifamily, while slower transaction activity weighs on construction, mortgage origination, and brokerage tied to residential markets. More broadly, the report underscores how sensitive real estate activity remains to interest rates and affordability.
University of Michigan Consumer Sentiment Index
The University of Michigan released the final readout of the Consumer Sentiment Index for January on January 23, with the headline Index rising to 56.4 from 52.9 in December. The gain was broad-based across demographics and political affiliation, with both the Current Conditions index and the Expectations index posting month-over-month increases. Despite the rebound, sentiment remains more than 20 percent below year-ago levels, reflecting continued strain on household purchasing power. On inflation, year-ahead expectations eased to 4.0 percent, the lowest reading since January 2025, while long-run expectations edged up to 3.3 percent and remain elevated relative to pre-pandemic norms.
For the broader economy and commercial real estate, the data points to stabilization rather than a clear improvement in consumer fundamentals. While easing short-term inflation expectations may offer some relief, elevated long-run expectations and persistent concerns about prices and labor market softness suggest consumers remain cautious. For CRE, that argues for continued selectivity across property types, with tenant health and pricing power increasingly shaped by slower real income growth and a consumer that is stabilizing at a low level of confidence rather than rebounding.
News
News to know
Commercial real estate construction is expected to see little growth in 2026 as high interest rates, rising material costs, tariffs, and labor shortages curb development across offices, apartments, hotels, and warehouses, according to The Wall Street Journal. Data centers are the key exception, with construction spending projected to rise 23 percent next year as tech firms continue to invest heavily in AI infrastructure and remain less sensitive to financing costs. While these projects are large and capital-intensive, they face mounting labor and cost pressures of their own, leaving overall nonresidential construction flat in nominal terms and down in real terms once inflation is considered.
Return-to-office numbers hold strong | Commercial Property Executive, January 19, 2026
Office attendance continued to improve at the end of 2025, with December marking the busiest in-office month since the pandemic despite typical holiday season softness, according to the latest data from Placer.ai. Nationwide office visits were 33.1 percent below 2019 levels, an improvement from 39.2 percent a year earlier, underscoring a slow but steady return to office trend as employers tighten attendance requirements heading into 2026. Miami remains the strongest market, with visits just 10.9 percent below pre-pandemic levels, followed by Dallas and New York City, while Chicago, San Francisco, and Denver continue to lag. Even so, San Francisco posted the fastest year-over-year growth in December, signaling that recovery momentum is broadening across major office markets as companies push toward more consistent in-person work patterns.
Special servicers pivot toward more foreclosures | Commercial Observer, January 20, 2026
Special servicers are taking a more aggressive stance on distressed CMBS loans, with foreclosure activity surging in 2025 as interim workout strategies lose traction, according to CRED iQ. Foreclosure balances jumped more than 68 percent year over year to nearly $16 billion, now representing close to 30 percent of the workout pipeline, as higher rates, valuation pressure, refinancing hurdles, and sponsor fatigue limit the viability of extensions and modifications. Other liquidation paths, including REO and discounted payoffs, also expanded, while note sales and modification activity remained relatively muted. The data point to a clear pivot away from delay tactics and toward enforcement, signaling that the CRE distress cycle is entering a more execution-driven phase with fewer opportunities for consensual resolutions.
Amazon joins the big-box league with its largest-ever store | Wall Street Journal, January 20, 2026
Amazon is entering big box retail with its largest physical store to date, a roughly 230,000 square foot location planned for Orland Park outside Chicago that combines grocery, general merchandise, and a large back-of-house fulfillment operation. About half the store will function as traditional retail while the rest supports online order assembly and pickup, reflecting Amazon’s push to better integrate e-commerce with in-person shopping. The move marks a shift from smaller and mixed physical retail experiments, as Amazon looks to compete more directly with established big box players like Walmart, Target, and Costco in a market where more than 80 percent of retail spending still occurs in stores. For commercial real estate, the project highlights continued demand for large-format retail sites that can also support logistics, even as traditional store concepts remain under pressure.
Donald Trump issued an executive order aimed at curbing large institutional investors’ involvement in the single-family housing market by restricting access to federal support and increasing antitrust scrutiny, rather than outright banning purchases. The order directs federal agencies to stop providing financing, guarantees, or other assistance for large investor acquisitions of homes that could be sold to owner-occupants, while carving out an exemption for build-to-rent communities. Treasury is tasked with defining key terms and reviewing rules around institutional ownership, and the Federal Trade Commission is asked to examine large portfolio acquisitions for anticompetitive effects. While the administration argues the move will improve affordability, data cited in the article show that large institutions account for a very small share of home purchases, suggesting the policy is more symbolic than transformative for housing supply and pricing dynamics.
Bond market's sell America signal grows louder as treasury yields soar | GlobeSt, January 21, 2026
The bond market is signaling rising concern about the U.S. economic outlook as the 10-year Treasury yield has climbed from about 4.0 percent in late October to nearly 4.3 percent, reflecting growing investor unease around inflation, tariffs, and policy uncertainty. Analysts cited by GlobeSt note that Treasurys are no longer acting as a traditional safe haven, as selling pressure tied to U.S. political risk is pushing yields higher rather than lower. Inflation expectations, tariff-related price pressures, and concerns about political interference with the Federal Reserve are all contributing to a higher term premium, while firmer recent economic data has also kept rates biased upward. For commercial real estate, the move reinforces a higher-for-longer interest rate backdrop, raising borrowing costs and cap rate pressure as markets grapple with a renewed “sell America” narrative tied to trade tensions and geopolitical risk under Donald Trump.
More than $100 billion in CMBS loans are maturing in 2026, with Morningstar estimating that roughly $58 billion will default at maturity and another $10 billion at risk, but most market participants see this as a recalibration rather than a systemic shock. Many loans originated at peak valuations are expected to be modified or extended, which historically leads to lower losses, while strong refinancing activity and growing private credit capacity are helping absorb stress. Risk remains uneven across property types, with office facing the sharpest valuation declines and ongoing bifurcation, while retail is viewed as comparatively stable due to limited new supply and improving fundamentals. Overall, 2026 is shaping up as a gradual workout and repricing cycle rather than a market break.
Washington D.C.’s largest office-to-residential conversion is underway in Dupont Circle, where two former office buildings are being redeveloped into The Geneva, a 15-story, 532-unit apartment project that includes 60 affordable units and ground-floor commercial space. Backed by roughly $95 million in tax abatements and a record $463 million in C-PACE financing, the $750 million project reflects the city’s broader strategy to revive a downtown dominated by vacant offices following the shift to remote work. Since 2024, office conversions have delivered nearly 1,900 housing units, and hundreds more are in the pipeline, with officials viewing residential reuse as a key but partial solution to economic headwinds, including shrinking federal employment and a projected budget shortfall.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Data and policy shaping the early 2026 CRE market
What happens when a cooling labor market, easing financing conditions, and renewed activity on housing policy all converge at once? This week on CRE Exchange, Omar Eltorai and Cole Perry discuss how these forces are shaping the early narrative for the 2026 commercial real estate market.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, January 26
8:30AM: Durable-goods Orders
Tuesday, January 27
10:00AM: Consumer Confidence
Wednesday, January 28
2:00PM: FOMC Interest Rate Decision
Thursday, January 29
8:30AM: US Productivity
10:00AM: Wholesale Inventories
Friday, January 30
8:30AM: Producer Price Index
Upcoming industry events
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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