CRE This Week - What's impacting the United States market?
October 19, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of October 19, 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
NFIB Small Business Optimism Index
NFIB Small Business Optimism Index: The National Federation of Independent Business released its September Small Business Economic Trends report on October 13. The Optimism Index fell 0.8 points to 97.9, below its 52-year average of 98.0. Six of the ten components declined, led by expected business conditions (net 6%, down 4 points) and the share saying it is a good time to expand (7%, down 5 points). The Uncertainty Index rose 1 point to 90, well above its historical average of 68. A net 31% of owners raised selling prices and a net 31% plan to, while 20% named inflation their top problem, up 4 points. A net 8% paid more on their latest loan, the highest share since June 2025, and the average short-term loan rate rose 0.7 points to 8.2%.
Fewer owners seeing this as a good time to expand, along with planned capital outlays slipping to 22%, suggests some small tenants may hold off on additional space. That matters most for neighborhood retail, service space, and smaller office and light industrial. Weaker sales (34%) and higher material costs (24%) were the most cited reasons for lower profits, which may keep margins tight for consumer-facing tenants. Short-term loan rates near the 8.3% historical average could weigh on owner-user purchases and smaller-balance deals that rely on bank credit. Labor quality (26%) remained the top problem and may slow the hiring that drives space needs.
The Bureau of Labor Statistics released the September CPI on October 14. Headline CPI rose 0.6% month over month (seasonally adjusted), up from 0.4% in August, and 3.7% year over year, up from 3.4%. Energy drove the increase. The energy index rose 5.2% on the month and 20.4% year over year, and gasoline rose 9.1% (34.2% year over year), accounting for over half of the monthly gain. Core CPI rose 0.3% for the second straight month and 2.6% year over year, up from 2.4% in August. Shelter rose 0.4% (3.2% year over year), with owners’ equivalent rent up 0.3% (3.3%) and rent of primary residence up 0.2% (2.8%). Lodging away from home rose 2.0% after a 2.4% gain in August, and airline fares rose 1.2% (22.4% year over year). Food was unchanged on the month and up 2.5% year over year.
The 10-year Treasury yield jumped to roughly 5.3% after the release, close to the 24-year high of 5.365% set on October 7, but gave back most of the move by the close as a tech-led equity sell-off tied to AI growth concerns pulled money into Treasuries. The increase was largely energy-led, but a 3.7% headline print leaves little room for long-term yields to fall meaningfully, and a 10-year near 5.2% leaves thin spreads over going-in cap rates on lower-yielding stabilized assets. Higher gasoline prices erode discretionary budgets, a headwind for value-oriented retail. Electricity (+4.4% year over year), piped gas (+5.0%), and water, sewer and trash (+4.8%) raise expenses most for owners on gross and modified gross leases. CPI rent (2.8% year over year) is a lagging measure and should not be read as a real-time multifamily signal. At this level of inflation, CPI-linked escalators in net lease and industrial leases become more valuable.
The Federal Reserve released the October 2026 Beige Book on October 14, with information collected through October 5. Two of the twelve Districts reported moderate growth (Dallas and Richmond), three modest, four slight, and three no significant change. Manufacturing led, with Dallas citing broad-based strength and six other Districts reporting modest to moderate gains. Consumer spending and employment were little changed in most Districts, and over half noted that spending was driven by higher-income households. Five Districts said firms were trimming or delaying hiring after AI investments. Prices were the key theme: three Districts described price growth as robust, eight as moderate, and four reported acceleration from the prior period. Higher diesel prices appeared in every report, alongside tariffs, insurance, and health care costs.
Commercial commentary pointed to tighter capital markets, with leasing holding up mainly in top-tier space. Kansas City lenders said spreads rose substantially and credit access diminished, Boston cited higher financing costs and tighter loan terms, and New York said commercial sales slowed as higher rates cut demand. Richmond brokers said more sellers are entering the market while buyers hesitate. Office was split: Manhattan leasing was brisk and Dallas activity was concentrated in top-tier assets, while Minneapolis reported higher vacancy and San Francisco called demand sluggish. Industrial was solid in New York, Dallas, and San Francisco, though Atlanta saw a slight vacancy uptick as new space delivered. Retail was mixed, with Chicago citing rising rents for prime space and Minneapolis reporting much higher urban than suburban vacancy. Atlanta and Dallas reported improving multifamily vacancy with concessions still elevated, and Texas and Richmond contacts flagged data center moratorium concerns.
The Bureau of Labor Statistics released the September PPI on October 15. Final demand prices rose 1.3% month over month (seasonally adjusted), the largest gain since March 2022, after increases of 0.5% in August and 0.2% in July. Unadjusted, final demand rose 6.3% year over year, the largest 12-month increase since December 2022. Energy drove the headline. Final demand goods rose 2.6%, the largest increase since the series began in 2009, with energy up 10.8% and gasoline up 20.3%. Final demand services rose 0.8%, with trade margins up 1.4% and transportation and warehousing up 3.4%. Final demand less foods, energy, and trade services rose 0.5% on the month and 5.0% year over year.
Core measures at 5.0% year over year point to cost pressure well beyond fuel, which supports the higher-for-longer rate backdrop and limits relief in debt costs. Construction costs are the most direct channel. Steel mill products rose 2.2% on the month and 27.6% year over year, and fabricated structural metal products rose 1.4% (7.4% year over year). Final demand construction was flat in September but is up 5.4% year over year, including 5.7% for new industrial buildings and 6.0% for new offices, which suggests higher input costs may not yet be fully reflected in contract pricing. Truck freight prices are up 19.3% year over year, raising operating costs for logistics tenants, and traveler accommodation prices jumped 5.6% on the month.
The Census Bureau released advance retail and food services sales for September on October 15. Sales totaled $745.0 billion, up 0.8% month over month (±0.4%) and 6.3% year over year (±0.5%), seasonally adjusted. Figures are nominal and not adjusted for price changes. August was revised up to 1.3% growth from 1.1%. Excluding autos, sales rose 0.9%, but excluding autos and gasoline the gain was only 0.2%, which is not statistically significant. Gasoline stations rose 6.4% on the month and 28.1% year over year, accounting for most of the headline. Food services and drinking places rose 1.1% (7.0% year over year), nonstore retailers 0.3% (8.2%), and electronics and appliance stores 0.6% (9.4%). Building materials fell 0.6%, general merchandise slipped 0.1%, clothing was flat, and grocery stores rose 0.5% but are up just 0.9% from a year ago.
Much of the nominal gain appears to reflect fuel prices rather than volume, so real spending growth was likely modest. Weak core categories suggest energy costs are limiting discretionary budgets, which could weigh on value-oriented general merchandise and apparel tenants. Restaurant spending held up, a positive for food and beverage tenancy in shopping centers and mixed-use. Grocery-anchored centers could see some benefit if higher fuel costs push households away from dining out, though year-over-year grocery growth is minimal. Higher freight and input costs from the PPI, including truck freight up 19.3% year over year, could also pressure retailer margins and store expansion plans into the holiday season.
News
News to know
Silicon Valley’s Dream City Has Crashed Into Small-Town Politics (Wall Street Journal, 2026-10-12)
A standoff between California Forever and Solano County leaders helped derail a roughly $3 billion shipyard that was meant to anchor the developer’s planned city 90 minutes from San Francisco. Saronic Technologies chose Brownsville, Texas in June, taking an estimated 10,000 jobs with it, after the county cited review timelines and voted down fast-track legislation in August. California Forever has raised about $1 billion and assembled roughly 60,000 acres for a community of 400,000 people, but county antisprawl rules require a countywide vote to develop farmland outside city limits. To work around that, the developer struck a deal to have Suisun City annex 35 square miles of its land, including a $10 million payment if finalized. The annexation still requires a tax-sharing agreement with the county, which has said publicly it cannot be forced to sign one.
Is Entitlement Risk Reshaping Industrial Development? (Commercial Property Executive, 2026-10-12)
Longer approval timelines and tougher scrutiny are raising the cost of industrial development as warehouse projects move closer to residential areas. A 2025 Journal of the American Planning Association study of 92 warehouse-related zoning actions found 76 occurred after 2020, with jurisdictions leaning on discretionary permitting, moratoria and denials, and California now imposes statewide design standards near sensitive receptors. Entitlement risk is showing up in land pricing, with shovel-ready sites commanding a premium and developers often waiting for approvals before closing. The concessions that ease approval can hurt leasing, since buffers and operating limits reduce truck court depth and dock positions, and in one case cut the viable tenant pool by roughly half.
In Sun Belt Multifamily, an Uneven Path Back Toward Boom Times (Commercial Observer, 2026-10-13)
Sun Belt multifamily markets are working through oversupply at different speeds, with positive rent growth in all major high-supply markets now expected by year-end 2027, a year later than originally forecast. National starts fell to 55,000 units in Q1 2026, the lowest quarterly level since 2011, while Sun Belt starts are roughly 75% below their 2022 high. Deliveries dropped from 696,000 units in 2024 to 531,000 in 2025 and are on track for about 421,000 in 2026. Austin and San Antonio are furthest along in recovery, while Dallas-Fort Worth still has more than 40,000 units under construction. Demand is a risk, with Florida’s net domestic migration down from 314,000 in 2022 to roughly 64,000 and Census projecting net immigration falling from 1.3 million to about 321,000 in the year ending June 2026.
Southern College Enrollment Boom Draws Private Money for Dorms (Bloomberg, 2026-10-15)
Southern public universities are using public-private partnerships to house surging enrollment, with developers issuing tax-exempt municipal bonds to build dorms on university-leased land and student rent servicing the debt. The University of Tennessee, Knoxville has added three residence halls since August 2025 through $350 million of mostly tax-free bonds, and the University of Mississippi is bringing a roughly $128 million bond sale to market this week. Twenty-three public-private dorm deals closed nationwide in 2025, the most since 2019, with about half in the Southeast. Student housing bond issuance is up about 70% this year to $3 billion, the highest since at least 2015, even as overall higher education issuance declines. Repayment relies solely on student rent, so these bonds carry more risk than the schools’ own debt; Tennessee’s Torchbearer Hall bonds carry an underlying BBB- rating, raised to AA with insurance. Schools are using the structure to preserve debt capacity as federal research funding and international student enrollment come under pressure.
A Widening Wealth Gap Complicates CRE’s Outlook (GlobeSt, 2026-10-15)
A Federal Reserve study of household wealth from 2022 to 2025 shows gains skewed toward older and already wealthy families. Inflation-adjusted median net worth rose 2% to $216,900, while mean net worth rose 7% to $1.24 million, indicating gains weighted toward the top. Median net worth for households ages 75 and older rose 37% after inflation, while households under 35 saw a 23% decline, with their mean net worth falling 33% from $200,800 to $135,400. Results were mixed in between: median wealth fell 4% for ages 65 to 74 and 6% for ages 45 to 54, and rose 3% for ages 55 to 64 and 5% for ages 35 to 44. Households that already owned homes and equities benefited from asset appreciation, while young families and renters lost ground. The findings do not establish how spending or property demand will change, but they suggest housing, retail, healthcare, and education assets serving affluent older households face a different demand backdrop than those reliant on younger households.
Manhattan office leasing reached 25.7 million square feet through the third quarter of 2026, up 2.3% year over year, according to JLL. Total vacancy fell to 12.6% from 14.7% a year earlier, year-to-date net absorption reached nearly 4.9 million square feet, and direct asking rents rose to $84.56 per square foot. Trophy vacancy has tightened to 4.9%, pushing tenants toward Lexington and Third avenues, where lease counts grew at average annual rates of 28.6% and 18.4% from 2021 through 2025. Some tenants are also splitting workforces across multiple buildings rather than relocating under one roof. Submarket conditions remain uneven: Hudson Yards vacancy is 7.0%, the World Trade Center 7.3%, and the Midtown Core 9.7%, while Midtown East stands at 16.9%. Buildings lacking amenities or owners with capital to fund improvements and tenant allowances remain challenged, so the market is still building-by-building. Stronger leasing is improving financing conversations and could widen the investable office universe, though it does not resolve valuation issues.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Rates spike, spreads diverge, and power infrastructure reshapes industrial
Rates hit their highest level since 2002, but not all CRE gets hit the same. In the latest CRE Exchange, Cole Perry and Omar Eltorai discuss where the 10-year Treasury is headed, why credit markets are splitting between strong and weak credits, and which sectors still have pricing power when rates rise. Cole also dives into original research on power infrastructure and industrial pricing: whether proximity to power actually moves property values, and how those premiums have shifted recently.
Important dates
Upcoming data releases and events
Data releases (Times in EDT)
Monday, October 19
10:00AM: NAHB Housing Market Index (Oct)
Tuesday, October 20
8:30AM: Housing Starts (Sep)
10:00AM: Pending Home Sales Index (Sep)
Thursday, October 22
8:30AM: Weekly Jobless Claims (Oct 17)
10:00AM: Leading Indicators (Sep)
11:00AM: Kansas City Fed Survey (Oct)
Friday, October 23
9:45AM: US Flash Manufacturing and Services PMIs (Oct)
10:00AM: University of Michigan Consumer Sentiment – Final (Oct)
Upcoming Industry Events
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.
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Sep 10, 2026