CRE This Week - What's impacting the United States market?
October 5, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of October 5, 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 Cotality Case-Shiller Home Price Index
S&P Dow Jones Indices released the July 2026 Case-Shiller results on September 29. The National Index (NSA) rose 1.9% year over year, up from 1.6% in June, while the 10-City and 20-City Composites gained 3.4% and 2.5%, respectively. Chicago led all metros at 6.9%, followed by New York (5.8%) and Cleveland (4.2%); Seattle posted the steepest decline at -1.6%. With CPI up 3.4% year over year in July, nominal gains again trailed inflation, marking the 14th straight month of real home price declines. Detroit was excluded from this release due to transaction recording delays in Wayne County.
Falling real prices reflect affordability that remains stretched, and the regional split is widening. Six of eight Eastern metros posted faster annual gains in July than in June, versus two of eight Western metros, consistent with tighter inventory and thinner construction pipelines in the East. Western markets with declining values, including Seattle, have also absorbed heavy multifamily deliveries in recent cycles; softer for-sale pricing there adds competition for apartment owners already working through new supply. Eastern metros with rising prices and limited pipelines look better positioned for rental demand.
The Conference Board released its Consumer Confidence Index for September on September 29. The index fell 6.7 points to 81.9 from 88.6 in August. The Present Situation Index dropped 7.9 points to 109.3, and the Expectations Index fell 5.9 points to 63.6, its third straight monthly decline. Net views of current business conditions turned negative for the first time since September 2024, and the labor market differential narrowed to +1.7% from +4.2%. Average 12-month inflation expectations rose to 6.1%, and 68.4% of consumers now expect higher interest rates over the next year, up 5.2 points from August.
The decline was broad, with current conditions, expectations, and labor market views all weakening together. That points to building caution rather than a one-off soft reading. Rising inflation expectations and an expected higher rate path add pressure on household budgets heading into the holiday season. Spending intentions for dining, travel, and entertainment are already declining on a six-month moving average basis, a negative for discretionary retail, restaurants, and hospitality. Essential and value-oriented retail look better positioned if sentiment keeps falling.
Job Openings and Labor Turnover Survey (JOLTS)
The Bureau of Labor Statistics released August 2026 JOLTS data on September 29. Job openings were little changed at 7.1 million, a 4.3% openings rate. Hires held at 5.2 million (3.3%) and total separations at 5.1 million (3.2%). Quits were steady at 3.1 million (1.9%), and layoffs and discharges were essentially unchanged at 1.6 million (1.0%). July was revised up, with openings at 7.3 million, hires at 5.1 million, and total separations at 5.1 million.
Openings, hires, and separations were all essentially flat. That describes a low-hire, low-fire labor market that has stopped deteriorating on the openings side but shows no sign of reaccelerating. The 1.9% quits rate, well below pre-pandemic norms, signals limited worker leverage and restrained wage pressure. For CRE, that is consistent with stable occupancy but leaves little room for expansion-driven leasing, particularly in office. Openings in real estate and rental and leasing fell to 50,000 from 95,000, a sharp one-month pullback in the sector's own hiring plans.
GDP (Third Estimate) and Personal Income and Outlays
The Bureau of Economic Analysis released its third estimate of Q2 2026 GDP and the August Personal Income and Outlays report on September 30. Real GDP was revised up to 2.2% annualized, driven by stronger investment, consumer spending, and government spending; Q1 was also revised up, to 2.5%. The Q2 PCE price index was revised down to 5.0% annualized (core: 3.3%).
In August, personal income rose 0.2% and disposable income rose 0.3%, both slower than in July. Nominal PCE rose 0.9% and real PCE rose 0.6%, pulling the saving rate down to 4.1%. The PCE price index rose 3.4% year over year, and core accelerated to 3.0%.
Firmer growth alongside accelerating core inflation kept tightening risk in play, and the 10-year Treasury yield approached 5.3% by midday September 30. Beneath the headline, the consumer picture is weaker: spending is outpacing income growth, and a 4.1% saving rate leaves a thin cushion heading into Q4. For CRE, a long end near 5.3% keeps fixed-rate borrowing costs elevated and limits room for cap rate compression. Real estate and rental and leasing was the largest industry contributor to the upward Q2 revision. That points to stronger sector activity in the spring than first reported, though August JOLTS data show the sector's hiring plans pulling back.
September Employment Situation and the ADP National Employment Report
The Bureau of Labor Statistics reported on October 2 that nonfarm payrolls rose by 29,000 in September, well inside the roughly ±122,000 threshold for statistical significance. The unemployment rate edged up to 4.2% from 4.1%, and revisions removed 60,000 jobs from July and August combined. Health care added 17,000 jobs, about half its 12-month average, while office-using sectors declined, including financial activities (-7,000), information (-10,000), and professional and business services (-9,000). Manufacturing added 9,000 and nonresidential specialty trade contractors added 12,000. Average hourly earnings rose 3.0% year over year in nominal terms, below 3.4% PCE inflation, so real wages are declining. ADP reported a stronger 90,000 gain in private payrolls, with gains in financial activities (+16,000) and professional and business services (+11,000) that conflict with the BLS read on office-using sectors.
The softer print pulled the 10-year Treasury yield back below 5.2%, and markets now price an over 80% chance of a hold at the October FOMC meeting, versus a week ago when a 25 bp hike was about 65% priced. That eases near-term rate risk for floating-rate borrowers, but a 10-year above 5% keeps fixed-rate debt costs and cap rate pressure elevated. Job losses concentrated in office-using industries point to limited net office absorption. Declining real wages and a 4.1% saving rate leave little cushion for holiday spending, a headwind for discretionary retail and hospitality tenants. Gains in manufacturing and nonresidential specialty trade contractors are consistent with ongoing data center and power construction.
The U.S. Census Bureau released August construction spending on October 1. Total spending rose 0.9% (±1.0%, not statistically significant) from July to a seasonally adjusted annual rate of $2.203 trillion, and was down 1.7% from August 2025. Private construction rose 1.1% to $1.655 trillion. Within that, nonresidential rose 1.0% (±0.5%) to $773.0 billion, and residential rose 1.1% (±1.3%, not statistically significant) to $882.3 billion; residential includes improvements, not just new construction. Year-to-date spending is down 3.1%. All figures are nominal.
Private nonresidential spending is down 1.0% year over year in nominal terms, so real activity is likely weaker. Manufacturing is down 19.8% as IRA- and CHIPS-era projects complete. Excluding manufacturing, private nonresidential is up roughly 6%, led by data centers at $85.0 billion, up 73.2% year-over-year. General office is down 9.7%, and commercial (which includes warehouse and retail), lodging, and health care are each down 5% to 10%. Limited new supply in retail, industrial, and hospitality should support occupancy at existing assets, while development capital continues to flow overwhelmingly to data centers.
News
News to know
Office CMBS Delinquency Rate at Highest Level This Decade (Commercial Observer, 2026-09-28)
The office CMBS delinquency rate hit 13.2 percent in August, the highest since at least 2019 and 1.6 times the 8.2 percent all-property rate, according to CRED iQ. Special servicing climbed to 15.7 percent on $189.6 billion of office debt, with maturity defaults, not missed payments, driving 71 percent of distress. Servicers are moving increasingly early: 51 percent of loans transferred to special servicing over the past 12 months were still current, a median of 11 months ahead of maturity, up from 42 percent the prior year. Of loans that transferred current between August 2024 and August 2025, 72 percent later went delinquent or matured unpaid, though larger loans ($100 million-plus) defaulted at a lower 63 percent rate and were more likely to return to the master servicer after restructuring, as seen with Chicago's Willis Tower and New York's 1211 Avenue of the Americas. About $39 billion of office CMBS matures over the next 12 months, including $13.9 billion already showing warning signs like sub-1.25x debt service coverage, with 3 Bryant Park ($1.13 billion) and 280 Park Avenue ($1.08 billion, 0.72x DSCR) among the largest at-risk loans.
The 10-year Treasury yield reached 5.1% and the 30-year touched 5.4% on September 23, the highest levels since July 2007. The move followed a 25 basis point federal funds rate increase to 3.75% to 4.00% on September 16, a unanimous 12-0 vote. Drivers include tariffs, trillion-dollar annual deficits, the Iran conflict and Strait of Hormuz closure, oil near $105 per barrel, and AI-related capital spending pulling debt buyers out of Treasuries. Higher yields are pushing cap rates up and straining underwriting for new development, value-add, and acquisitions, with broken multifamily trades reported. Lender-forced multifamily sales are rising as floating-rate borrowers lose the ability to extend, and office workouts face a higher cost of capital on impaired collateral. Some argue elevated cap rates and recovering fundamentals create opportunity; NCREIF data cited by JLL show two-year average returns of 18.2% following rate hikes since 2000, versus 4.7% following cuts.
A new Bain & Co. report finds the AI industry needs $6 trillion in annual revenue by 2031 to justify the current wave of data center capital spending, but existing consumer and enterprise AI applications will generate at most $1.8 trillion, leaving a $4.2 trillion gap. Google, Amazon and Microsoft alone project a combined $615 billion in 2026 capex. Bain estimates "physical AI" (robotics and simulation), autonomous vehicles and industrial automation, and AI-integrated advertising could together contribute roughly $1.5 trillion in new annual revenue, but the remainder depends on AI applications that do not yet exist. For data center developers and investors, the findings underscore the risk that current buildout assumptions rest on unproven future demand rather than realized revenue streams.
The housing story nobody's telling about AI (Institutional Real Estate, Inc., 2026-10-01)
A housing investor makes the case that AI-driven income compression among knowledge workers, the core renter base for middle-income, market-rate apartments, could push the housing market toward a K-shaped split. Demand for amenitized product would hold at the top and demand for affordable housing would expand at the bottom, leaving conventional middle-market rentals squeezed as households trade down. The larger opportunity, in this view, is repositioning existing middle-market stock using property tax abatements and public facility corporations, rather than converting offices to apartments. Nearly half of U.S. renters already spend more than 30 percent of income on housing.
Cities Across the US Are Turning Attics, Backyards and Garages Into Housing (Bloomberg, 2026-10-02)
Accessory dwelling units (ADUs) are gaining traction as a source of lower-cost rental supply, but construction costs limit how far they can scale. Roughly one in four new housing structures built in California last year was an ADU, and in Los Angeles and San Francisco ADUs drew more permits than all other housing types combined. New York City, which began allowing ADUs in 2024, expects about 25,000 of the 80,000 units projected under City of Yes over 15 years to be ADUs, against an estimated need of 700,000 units over the next decade. Costs remain the main obstacle: a garage conversion quote runs around $200,000, and a 540-square-foot standalone unit in Irvine cost $308,000, against expected rents of $1,000 to $1,200 a month in Queens. A city pilot offering up to $395,000 in loans and grants drew more than 2,800 applications but is funded for only 25 homeowners a year. Most experts expect ADUs to remain a marginal supplement to multifamily production.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
AI in CRE: What's real, what's hype, and what readiness looks like
Omar and Cole sit down with Michael Clawar, who has spent over a decade building predictive analytics and data science tools for CRE, and now leads innovation at Altus Group. This conversation covers where cheaper AI capability is reshaping CRE workflows, the role of institutional knowledge and data infrastructure, what clients in acquisitions and asset management really want from AI, and what a recent NBER study found about how AI affects professionals at different experience levels.
Important dates
Upcoming data releases and events
Data releases (Times in EDT)
Monday, October 5
9:45AM: US Services PMI (Sep)
10:00AM: ISM Services PMI (Sep)
Tuesday, October 6
8:30AM: U.S. Trade Balance (Aug)
Wednesday, October 7
2:00PM: FOMC Meeting Minutes
3:00PM: Consumer Credit (Aug)
Thursday, October 8
8:30AM: Weekly Jobless Claims (Oct 3)
10:00AM: Monthly Wholesale Trade (Aug)
Friday, October 9
10:00AM: University of Michigan Consumer Sentiment – Preliminary (Oct)
Upcoming Industry Events
October 5 – 7: CREDA Conference 2026 (Denver, CO)
October 7 – 9: PREA Annual Investor Conference (Washington, DC)
October 12 – 15: NCREIF Fall Conference 2026 (Orlando, FL)
October 19 – 21: SIOR Fall Event 2026 (New York, NY)
October 20 – 21: CREtech New York 2026 (New York, NY)
October 26 – 28: ULI Fall Meeting 2026 (Miami, FL)
October 26 – 28: CoreNet Global Summit (Chicago, IL)
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.
Resources
Latest insights
Sep 10, 2026
Labor data diverges, data centers dominate Beige Book, CRE implications from bond rout
