CRE This Week - What's impacting the United States market?
August 17, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of August 17, 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
The National Federation of Independent Business released its Small Business Economic Trends Report for July on August 11, 2026. The headline Optimism Index rose 2.4 points to 99.8, crossing back above the 52-year average of 98.0 and reaching its highest level since August 2025. Eight of ten components improved, led by a 9-point jump in hiring plans to a net 20% (the strongest since October 2022) and a 5-point rise in capital expenditure plans to 25% (highest since December 2024). The share of owners planning to raise prices fell 7 points to a net 28% after four straight monthly increases, though that remains well above the historical average of 14%. Labor quality or availability displaced taxes as the top business problem, cited by 27% of owners, while the Uncertainty Index ticked up 2 points to 91, still well above its historical average of 68.
If hiring and capex intentions follow through, the data would support firmer near-term demand for smaller office, neighborhood retail, and light industrial space, as small businesses account for a large share of leasing activity across those formats. The pullback in price plans is worth watching for service-sector tenants; if it holds, it could ease some of the margin pressure that has been weighing on smaller-format occupiers. That said, still-negative earnings trends (net -16%), elevated uncertainty, and short-term loan rates back up to 7.9% after a June dip suggest owners are signaling cautious optimism rather than a broad commitment to expansion.
The National Association of Realtors released existing-home sales data for July 2026 on August 11. Sales fell 1.7% month over month to a seasonally adjusted annual rate of 4.06 million, though they were up 0.7% year over year. Regionally, sales rose in the Northeast, held steady in the West, and declined in the Midwest and South. The median existing-home price rose 2.0% year over year to $434,100, marking the 37th consecutive month of annual price gains. Inventory ticked down 1.9% from June to 1.54 million units, representing a 4.6-month supply, unchanged from both the prior month and a year ago. The average 30-year fixed mortgage rate in July was 6.54%, up from 6.49% in June but down from 6.72% a year ago. First-time buyers accounted for 29% of transactions, down from 33% in June, while cash buyers represented 26% of sales. Days on market edged up to 29 from 28.
At 6.54%, mortgage rates remain well above the threshold NAR's chief economist identified as necessary to meaningfully unlock demand, and the drop in first-time buyer share to 29% reflects that affordability constraints are still keeping entry-level households on the sidelines. The Housing Affordability Index improved to 103.3 from 98.3 a year ago, driven largely by income growth rather than price relief, with the median price still up 2.0% annually. For multifamily, the combination of constrained resale inventory at 4.6 months of supply and elevated ownership costs continues to extend renter tenure and support occupancy. Transaction-related consumer spending on home improvement and furnishings stays muted at these volumes, a persistent headwind for power center and home goods retail tenants.
The Bureau of Labor Statistics released the Consumer Price Index for July 2026 on August 12. Headline CPI rose 0.1% month-over-month on a seasonally adjusted basis after falling 0.4% in June, with the annual rate easing one tenth to 3.4%. Core CPI (all items less food and energy) rose 0.2% on the month after being unchanged in June, and was up 2.5% year-over-year, down from 2.6%. Energy continues to distort the headline: the energy index fell 1.5% in July but remains up 14.7% year-over-year, with gasoline up 24.6% over that period. Shelter rose 0.1% on the month and 3.2% annually; owners' equivalent rent and rent of primary residence were both up 0.3% in July, with annual readings of 3.2% and 2.9%, respectively. Food rose 0.1% monthly and 3.0% year-over-year, with food away from home up 0.3% and 3.4%.
The 3.4% headline is largely an energy story, and core at 2.5% annually tells a cleaner picture of underlying inflation. Shelter at 3.2% year-over-year still overstates real-time conditions in most markets given CPI's lagged rent methodology, and that gap should narrow as leases signed in the current softening cycle roll into the index. If core continues to ease, the 10-year Treasury has room to drift lower, which would improve refinancing conditions and ease cap rate pressure at the margin. The energy-driven headline complicates the Fed's path, though, and food away from home at 3.4% annually alongside transportation services at 2.9% remain real cost pressures for retail and hospitality tenants.
The Bureau of Labor Statistics released the Producer Price Index for July on August 13, showing the headline index for final demand unchanged month over month, following a downwardly revised 0.1% decline in June and a 0.5% gain in May. On an unadjusted basis, final demand prices rose 4.7% year over year. Core PPI (excluding foods, energy, and trade services) rose 0.4% in July after a 0.1% increase in June, also up 4.7% annually. The flat headline masked offsetting moves: services prices rose 0.2%, led by a 0.6% gain in services excluding trade, transportation, and warehousing, while goods prices fell 0.7% on a 3.1% drop in energy, including a 5.7% decline in gasoline. Final demand construction prices rose 2.2%, the component that, along with services, offset the goods decline.
The construction print is the more relevant data point for CRE. A 2.2% monthly jump in final demand construction prices, alongside a 5.0% rise in lumber at the intermediate processed goods level, points to renewed upward pressure on hard costs for projects still in the pipeline, particularly multifamily and industrial developments sensitive to framing and structural material costs. On the offsetting side, falling energy prices, including a 1.8% drop in truck transportation of freight rates, provide some relief on operating expenses for logistics and distribution tenants. Net effect: input cost relief on the energy and transport side is being outweighed by firmer construction pricing, keeping development underwriting tight even as headline inflation held flat.
The U.S. Census Bureau released its advance estimate of retail and food services sales for July on August 14, showing total sales of $763.6 billion, down 0.6% from June (not statistically distinguishable from zero) but up 5.0% year over year. June was unrevised at up 0.2%, also not significant. Ex-auto sales fell 0.3%; ex-auto and gas, sales fell 0.2%. May through July sales rose 6.3% year over year. These figures are nominal, so a flat-to-negative monthly print against ongoing inflation implies a real decline in sales volume. Gasoline stations posted a 16.2% annual gain that is largely a price effect; nonstore retailers rose 7.7% year over year despite a 2.2% monthly pullback; building material and garden equipment dealers were up 6.7% annually.
A soft, statistically uncertain headline paired with a real-terms decline points to a consumer losing some momentum heading into the back half of the year, though the confidence interval means this print alone shouldn't drive a strong directional read. Continued strength in nonstore retail supports last-mile and infill industrial demand, while steady building materials sales point to resilience in home-improvement-oriented retail. Retail landlords should treat the 5.0% annual gain as a nominal ceiling, not a proxy for real tenant sales growth, particularly for gasoline-exposed categories.
The University of Michigan released preliminary results for August on August 14, showing the headline Index of Consumer Sentiment falling to 51.0 from 55.2 in July, down 7.6% month over month and 12.4% year over year, ending two months of improvement. Current Conditions fell to 51.8 and Expectations to 50.6, driven by an 11% short-run and 17% long-run drop in views of business conditions. Declines were broad-based but concentrated among older, lower-income, and non-college-educated consumers. Year-ahead inflation expectations rose to 4.3% from 4.2%; long-run expectations held at 3.3%. Only 8% of consumers expect income growth to outpace inflation over the next year, down from 18% in December 2024.
The concentration of weakness among lower-income households reinforces the K-shaped consumer split relevant to retail and multifamily: value-oriented retail and Class B/C apartments carry the most exposure. With 92% of consumers doubting their income will keep pace with prices, rent growth assumptions in workforce and affordable segments should stay conservative. Firmer inflation expectations amid weaker sentiment adds tension to the rate path worth watching.
News
News to know
News to know
SEC exempts data-center bonds from key securitization rules | Bloomberg, August 10, 2026
The SEC clarified that a major subset of data center asset-backed securities are not subject to post-2008 securitization rules, including risk retention requirements, because data centers are physical assets rather than financial assets that liquidate over time. The guidance, issued in response to a law firm inquiry, stops short of a formal rule change but will have practical consequences for issuers that had been applying the rules as a precaution. Data center ABS issuance has grown from $2.4 billion in 2020 to $15.5 billion annually last year and is on pace for a new record in 2026. The exemption does not extend to CMBS backed by data centers, which remain subject to existing rules because the collateral is a mortgage rather than the underlying physical assets.
How hospitality is reshaping the modern office | Commercial Property Executive, August 10, 2026
With office visits up 8.5 percent year-over-year through June but still 21 percent below 2019 levels, per Placer.ai, landlords and tenants are increasingly borrowing from the hospitality playbook to give employees more reasons to come in. Across a range of recent projects, designers are replacing formal, hierarchical layouts with hotel-inspired sequencing, food and beverage programming, flexible lounge areas, and amenity stacks that treat the arrival experience as part of the product. The projects span asset classes and markets, including mixed-use repositioning in Manhattan, trophy tower upgrades in San Francisco, coworking in Tampa, and law firm and private equity offices in Dallas and Menlo Park, with a consistent emphasis on comfort, service, and social connection over square footage or location alone. The trend reflects a broader competitive shift in which buildings are evaluated on the overall experience they provide, not just their physical specs.
A June fire at a Lineage cold storage facility in Los Angeles's Boyle Heights neighborhood has generated nearly 4,000 odor complaints, a cleanup bill of up to $100 million, and growing regulatory scrutiny of large industrial buildings near residential areas. LA Mayor Karen Bass issued an emergency order blocking rebuilding until cleanup is complete, and a city councilmember has proposed ordinances prohibiting new cold storage warehouses near schools and other sensitive sites. The broader backlash extends to data centers, where at least 20 proposed projects were cancelled after community opposition in early 2026, affecting $41.7 billion in potential investment. Average warehouse size grew 25 percent between 2012 and 2022 per CBRE, concentrating more materials in structures that are increasingly difficult for firefighters to access. Despite the scrutiny, large-format leasing and construction activity has picked up, with 146 leases signed for warehouses over 500,000 square feet in 2025, up 31 percent from 2024, and 305 million square feet under construction as of Q2 2026, up 18 percent year over year.
The AI boom is supercharging San Francisco rent prices | Wall Street Journal, August 12, 2026
San Francisco has reclaimed the highest average rent in the U.S., with metro-area asking rents up 18% in less than two years to $3,728 a month. The AI boom is driving the surge as elevated tech salaries collide with constrained housing supply, with some renters paying as much as $1,500 over asking price to secure units and landlords offering larger buyouts to move tenants out of rent-controlled apartments. Separately, office REIT returns rose 3.6% in July per the FTSE Nareit U.S. Real Estate Index, part of a 16.5% year-to-date turnaround following a 14% decline in 2025.
More than 50 US colleges have closed or merged since 2020 amid declining enrollment and rising debt, putting thousands of acres of campus real estate on the market, with Huron projecting more than 400 further private college closures or mergers over the next decade. Outcomes hinge on location and property condition: urban campuses have sold quickly, including Northeastern's $215 million purchase of Marymount Manhattan College, while rural schools like Northland College in Wisconsin have lingered on the market for nearly a year. Redevelopment ranges from the US Coast Guard's $126.5 million purchase of Birmingham-Southern's 192-acre Alabama campus to Akron Children's Hospital's $8 million acquisition of Notre Dame College's Ohio campus. Municipal bondholders face uneven recoveries, with Cazenovia College's New York campus selling at a 60% discount for a 50% debt recovery, while local opposition and aging, highly specialized buildings continue to complicate sales.
Yesterday's costly Treasury sale raises CRE hurdle rates | GlobeSt, August 14, 2026
The Treasury sold $25 billion in 30-year bonds on Thursday at a 5.22% yield, the highest for that maturity since 2001, following a $42 billion 10-year note sale at the highest yield since 2007. Because property valuation is a long-duration exercise, higher long-end yields raise the hurdle rate real estate income must clear even if the Fed continues cutting short-term rates. Deals can still work, but increasingly require some combination of stronger NOI growth, lower leverage, a higher going-in cap rate, or a lower purchase price, while owners with approaching maturities face a steeper debt-service burden at refinancing. The article notes that lending spreads across CMBS, bank, and life-company channels, along with income growth, will determine how much of the Treasury move ultimately passes through to cap rates.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Treasuries up, spreads down, and office improving
Last quarter, the story was floating rate relief and fixed rate absorbing a small headwind. In Q2, that flipped and deal structuring conversations have fully repriced to a higher-for-longer world as a result.
In the latest CRE Exchange, Omar Eltorai and Cole Perry sit down with Andrew Pabon, Altus Group's Director of Debt Advisory, to break down the Q2 2026 US Debt Capital Markets Survey results and discuss the CRE financing environment. A few of the key data points:
Treasury yields moved up 20 to 30 bps quarter-over-quarter while SOFR was effectively flat
Spread compression continued but fell short of fully offsetting benchmark moves for fixed-rate products
Survey results showed lender quoting activity remained healthy (~1,800 quotes, with per-participant engagement near recent highs)
CMBS delinquency data sending a split signal: the headline rate improved, but loans past their maturity date without a payoff hit a new high
Office financing costs keep grinding lower, but the office recovery is still narrow and not sector-wide
Non-CRE private credit stress may prove a tailwind for CRE private credit, given the transparency advantage of real estate debt structures and basis of CRE collateral values
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, August 17
8:30 AM: Empire State Manufacturing Survey (Aug)
10:00 AM: NAHB Housing Market Index (Aug)
Tuesday, August 18
8:30 AM: Housing Starts (Jul)
8:30 AM: Import Prices (Jul)
9:15 AM: Industrial Production (Jul)
9:15 AM: Capacity Utilization (Jul)
10:00 AM: Pending Home Sales Index (Jul)
Thursday, August 20
8:30 AM: Philadelphia Fed Business Outlook Survey (Aug)
8:30 AM: Weekly Jobless Claims (Aug 15)
10:00 AM: Leading Indicators (Jul)
Friday, August 21
9:45 AM: Flash Manufacturing PMI (Aug)
9:45 AM: Flash Services PMI (Aug)
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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