CRE This Week - What's impacting the United States market?
May 11, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of May 11, 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
JOLTS, ADP Employment, and the April Employment Situation
The BLS released the March Job Openings and Labor Turnover Survey (JOLTS) on May 5, ADP released its April National Employment Report on May 6, and the BLS released the April Employment Situation on May 8. In March, job openings held at 6.9 million, hires rebounded to 5.6 million, and layoffs edged up to 1.9 million; year over year, quits were down 285,000 and layoffs were up 272,000. In April, ADP counted 109,000 private-sector jobs added, led by education and health services (+61,000), with mid-sized firms contributing just 8,000 of the total. The BLS put April nonfarm payrolls at 115,000, concentrated in health care, transportation and warehousing, and retail trade. The unemployment rate held at 4.3 percent, average hourly earnings rose 3.6 percent year over year, and federal employment fell another 9,000, extending cumulative losses to 348,000 since October 2024.
The three releases collectively pointed to a labor market still generating jobs but losing breadth. Growth was concentrated in defensive sectors with limited spillover to office leasing or business services expansion, and mid-sized employer weakness reinforced that signal. The JOLTS data showed workers growing more cautious, with fewer quits and more layoffs year over year, a trend that tends to slow lease commitments and tenant expansion. Wage growth at 3.6 percent is easing gradually, constructive for tenant margins but insufficient to prompt near-term Fed action. A June cut looks unlikely, keeping borrowing costs elevated through at least mid-year.
The U.S. Census Bureau and HUD released the February and March 2026 New Residential Sales reports simultaneously on May 5, following delays to the original schedule. March sales came in at a seasonally adjusted annual rate of 682,000, up 7.4% from February's 635,000 and 3.3% above the year-ago pace. February itself rebounded 8.9% from January's 583,000. Both monthly changes carry wide confidence intervals of plus or minus 15% to 21%, so the directional improvement is clearer than the magnitude. Median prices fell to $387,400 in March, down 5.3% from February and 6.2% year over year. Inventory stood at 481,000 units, or 8.5 months of supply, down from 9.1 in February but still historically elevated.
The broader picture has not changed much in several months. Builders continue to lean on concessions and rate buydowns to move product, median prices keep drifting lower, and supply remains well above balanced levels. Mortgage rates stubbornly above 6% have been the persistent constraint, and until that changes, sales are likely to stay range-bound and housing-related consumer spending will remain muted. For multifamily, the ongoing affordability squeeze in for-sale housing continues to support rental demand, though heavily incentivized entry-level new homes still compete directly with Class B apartments and build-to-rent communities for cost-sensitive renters.
The U.S. Census Bureau released its Monthly Construction Spending report for March 2026 on May 7, delayed from its April 1 schedule. Total construction spending came in at a seasonally adjusted annual rate of $2,185.5 billion, up 0.6% from February and 1.6% above March 2025. Private construction rose 0.8% to $1,659.0 billion, led by a 1.7% rebound in residential to $929.7 billion. Private nonresidential slipped 0.2% to $729.4 billion, and public construction edged down 0.2% to $526.4 billion.
The modest overall gain masks ongoing softness in private nonresidential activity, which has been in a gradual contraction since late 2023. The residential bounce is a relative bright spot, though it follows several weak months and the margin of error is wide. For CRE, the continued pressure on private nonresidential spending reflects a construction market where tariff-driven cost inflation and tight financing conditions are limiting new starts across most property types outside of data centers, which have been one of the primary sources of private nonresidential growth. Less new supply across office, industrial, and retail supports occupancy and rent stability in markets where demand remains active.
The University of Michigan released the preliminary Consumer Sentiment Index for May on May 8. The headline index fell to 48.2, down 3.2% from April's 49.8 and 7.7% below May 2025. Current conditions dropped sharply, falling 9.0% to 47.8 as consumers cited high prices weighing on personal finances and buying conditions for major purchases. The expectations index edged up slightly to 48.5 from 48.1. About one-third of respondents spontaneously mentioned gasoline prices and roughly 30% cited tariffs. Year-ahead inflation expectations eased modestly to 4.5% from 4.7% in April but remain well above the 3.4% reading recorded in February, before the Iran conflict began. Long-run inflation expectations ticked down to 3.4% from 3.5%, still above the 2.8% to 3.2% range seen throughout 2024.
The Iran conflict is adding fuel-cost pressure to a consumer that was already deeply pessimistic. Sentiment was tracking near multi-year lows before the war began, and the surge in gasoline prices has accelerated the deterioration in current conditions, with real income expectations declining for three straight months. If elevated inflation expectations prove accurate, the Fed's ability to cut rates would be constrained, keeping borrowing costs high and limiting cap rate relief across property types. For CRE, the sectors most at risk are those tied to discretionary spending: hospitality, experiential retail, and lifestyle formats where consumer confidence drives foot traffic and lease-up. Essentials-based and necessity-anchored retail remain more insulated. Until energy supply disruptions are resolved and pump prices recede, the path to improved leasing momentum and transaction volume stays narrow.
News
News to know
News to know
A Redfin-commissioned Ipsos survey found that 47 percent of U.S. residents oppose construction of an AI data center in their neighborhood, versus 38 percent in support. Opposition centers on electricity and water strain, potential energy cost increases, noise, and broader concerns about AI eliminating jobs, with roughly three in five respondents holding that view. Support is highest among younger cohorts, with 50 percent of millennials and 48 percent of Gen Zers in favor, compared to 22 percent of baby boomers. Republicans back neighborhood data centers at nearly twice the rate of Democrats (49 percent vs. 36 percent). Data centers ranked as the most opposed building type in the survey, narrowly ahead of converting single-family homes to multi-unit housing (46 percent opposed). The U.S. currently has more than 3,000 AI data centers, with thousands more in development.
Office distress dominates largest US CMBS markets | Commercial Observer, May 4, 2026
CRED iQ's analysis of the 50 most populous U.S. MSAs put the aggregate CMBS distress rate at 12.2% as of April 2026, capturing loans that are delinquent, in special servicing, or REO. Office leads property types at 17%, followed by mixed-use at 14.6%; industrial sits at 1.7%. Multifamily distress across the top 50 cohort hit 11.4%, a sharp shift from its historically defensive profile, driven by rent normalization, floating-rate debt service, and 2021-2022 vintage maturity pressure. Three metros account for a disproportionate share of the distressed balance: Chicago at 25.6%, Denver at 42.3%, and Minneapolis at 39.5%. Sun Belt metros (Miami, Phoenix, Dallas, Houston, Atlanta) continue to print sub-10% distress.
Taxes on second homes are springing up across America | Wall Street Journal, May 4, 2026
State and local governments across the U.S. are seizing on a juicy new target for plugging budget holes and easing housing shortages: second homeowners. New York City is planning to tax pieds-à-terre worth $5 million or more. Rhode Island’s “Taylor Swift tax” will hit homes valued at over $1 million that are uninhabited for at least 183 days of the year. Nicknamed after the pop star who owns a waterfront mansion in Westerly, R.I., the measure is set to take effect in July. Meanwhile, courts are weighing proposals in Montana and San Francisco for extra levies on vacant homes. These taxes are generating furious debate. Supporters say they would help improve housing affordability by encouraging owners of second homes to turn them into long-term rentals rather than let them sit vacant.
Seller-carry financing is gaining traction in commercial real estate as higher rates and tighter bank lending standards limit conventional debt availability, according to Progressive Real Estate Partners SVP Paul Galmarini. The structure allows buyers to acquire with less upfront capital while giving sellers ongoing income and potential pricing upside. Progressive recently closed a $2.45 million sale of a 2,230-square-foot vacant drive-thru restaurant in Corona, California using seller financing; the buyer plans to convert the property into a Troy's Burgers location. Galmarini noted a broader shift toward owner/user acquisitions, particularly among independent operators, though available inventory remains constrained relative to leasing options.
Wall Street readies data center IPOs as AI-linked debuts surge | Bloomberg, May 6, 2026
Wall Street is preparing a wave of data center IPOs over the next 18 months as investor demand for AI infrastructure exposure intensifies. Singapore-based DayOne Data Centers is among the first movers, and roughly half a dozen additional platforms are circling U.S. listings. Equinix and Digital Realty, the two largest publicly traded data center REITs, have already outperformed the S&P 500 by more than 20% this year and are near record highs. Bankers at Morgan Stanley and JPMorgan note that data centers are significantly underrepresented in public markets, and that new listings will help sponsors recycle capital for further development. Leverage is flagged as a key diligence point given varying debt structures across platforms. JLL estimates the sector will require up to $3 trillion in investment by 2030 to support AI workloads.
The SEC proposed allowing publicly traded companies to report financial results semiannually rather than quarterly, replacing the current three quarterly and one annual filing requirement with one semiannual and one annual report. Nareit confirmed it will support the rule in its comment submission. Industry reaction is split: PwC's Tim Bodner cautioned that reduced disclosure frequency could delay investor access to material data, a meaningful concern given the granularity of REIT reporting. Piper Sandler's Alexander Goldfarb sees an upside, noting that eliminating two quarterly reports would shrink blackout periods and allow more consistent market engagement. Bond covenants requiring quarterly reporting could limit how widely the change is adopted even if finalized.
Commercial and multifamily mortgage originations jumped 52% year over year in Q1 2026 and 39% from Q4 2025, according to the MBA's quarterly originations survey. Multifamily led all property types with a 76% annual increase, followed by hotels at 59% and industrial at 57%. Office originations rose 30% year over year and healthcare was the only major category to decline, down 40%. Among capital sources, investor-driven lenders posted the largest gain at 127% year over year, while CMBS lending rose 45% and GSE multifamily volume increased a more modest 8%. The results are consistent with MBA's full-year forecast of $805.5 billion in total commercial mortgage originations for 2026, up 27% from 2025, though rising delinquencies in office and multifamily remain a watch item as the maturity wall works through the system.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Insight | Under the hood of niche valuations: The income side of the story
New data from Altus Group’s US Research and Valuation Advisory teams examines the underwriting assumptions behind niche property valuations. Contract rents, operating expenses, and NOI growth have all changed over the past five quarters, narrowing the cushion beneath niche's premium pricing stance. With niche assets still commanding the tightest cap rates in the market, this analysis provides a closer look.
Podcast | CRE workouts, maturity walls, and the art of restructuring
Omar Eltorai sits down with Shlomo Chopp of CASE Equity Partners for a direct conversation about CRE distress; the causes, the workout process, and what it takes to get to a resolution.
Shlomo has been through this before. With over 20 active workout situations and more than two decades in CRE restructuring and advisory, he offers an expert perspective on the maturity wall, the limits of extend-and-pretend, why DPOs are harder to achieve than many borrowers expect, and what his Road to Default series is trying to teach the market.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, May 11
10:00 AM: Existing Home Sales (Apr)
Tuesday, May 12
6:00 AM: NFIB Optimism Index (Apr)
8:30 AM: Consumer Price Index (CPI) (Apr)
2:00 PM: Monthly U.S. Federal Budget (Apr)
Wednesday, May 13
8:30 AM: Producer Price Index (PPI) (Apr)
Thursday, May 14
8:30 AM: U.S. Retail Sales (Apr)
8:30 AM: Initial Jobless Claims (May 9)
8:30 AM: Import Price Index (Apr)
10:00 AM: Business Inventories (Mar)
Friday, May 15
8:30 AM: Empire State Manufacturing Survey (May)
9:15 AM: Industrial Production (Apr)
9:15 AM: Capacity Utilization (Apr)
10:00 AM: Home Builder Confidence Index (May)
Upcoming Industry Events
May 17 – May 20: MBA CRE Servicing Solutions Conference (San Diego, CA)
May 18 – May 20: ICSC Las Vegas
May 19 – May 20: Real Estate Research Institute Annual Conference (Chicago, IL)
May 20 – May 21: NAIOP I.CON East (Jersey City, NJ)
May 28 – May 29: AREUEA National Conference (Washington, DC)
Upcoming Industry Events
May 17 – May 20: MBA CRE Servicing Solutions Conference (San Diego, CA)
May 18 – May 20: ICSC Las Vegas
May 19 – May 20: Real Estate Research Institute Annual Conference (Chicago, IL)
May 20 – May 21: NAIOP I.CON East (Jersey City, NJ)
May 28 – May 29: AREUEA National 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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