CRE This Week - What's impacting the United States market?
April 21, 2025 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of April 21, 2025
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. Bureau of Labor Statistics released the Import and Export Price Indexes for March on April 15. The report showed that Import prices slipped 0.1% in March (the first decline since September) after a 0.2% rise in February. Cheaper fuel imports (-2.3%) outweighed a 0.1% uptick in non‑fuel goods. Year‑over‑year, the Import Price Index slowed to a 0.9% increase from 1.6% in February, while export prices were flat on the month, indicating a temporary pause in trade‑related inflation pressures ahead of the next round of potential tariffs.
The moderation in import prices arrived just as an April 8 executive order raises reciprocal tariffs on low-value Chinese shipments and lifts de-minimis duties to as much as 90%, injecting fresh cost uncertainty into global trade. For commercial real estate, that volatility may reshape both construction and logistics strategy. Developers may pause speculative ground-up projects amid fluctuating material costs, while retailers and 3PLs may respond to freight disruptions by expanding domestic inventory buffers near ports and intermodal hubs.
The U.S. Census Bureau released advance estimates for monthly retail and food service sales on April 16, showing that sales climbed 1.4 percent month-over-month in March 2025 to a seasonally adjusted $734.9 billion, the highest monthly gain since January 2023. Sales were up 4.6 percent year-over-year during March, and receipts for 2025 Q1 ran 4.1 percent ahead of the same period a year earlier. Motor‑vehicle and parts dealers led the advance with a 5.3 percent surge as buyers likely rushed to beat impending 25 percent auto tariffs, while gasoline stations and building‑materials outlets also posted solid increases.
The retail “control” group, which excludes autos, gas, building materials, and food services (and directly feeds into GDP calculations), rose 0.4% in March following a 0.2% decline in February. This points to modest but sustained momentum in core consumer spending, even as broader consumer sentiment shows signs of weakening. In the commercial real estate market, exceptionally lean construction pipelines continue to limit new supply. As a result, retail real estate fundamentals remain tight, allowing owners to retain pricing power and favorable lease terms, even in the face of potential GDP stagnation.
The April 2025 NAHB/Wells Fargo Housing Market Index, released on April 16, showed builder confidence in the market for newly built single-family homes edged up one point to 40 from March's reading of 39, signaling continued caution among builders and a slow start to the spring housing season.
The persistent use of price cuts and sales incentives in the residential sector, with 29% of builders cutting home prices by an average of 5% and 61% offering sales incentives, indicates ongoing affordability challenges that may similarly affect commercial property valuations. Policy uncertainty, material cost volatility due to tariffs, and labor shortages are creating headwinds for residential construction that likely extend to commercial development, suggesting CRE professionals should anticipate similar cost pressures and supply chain challenges.
Housing Permits + Building Starts
The U.S. Census Bureau released its monthly report on New Residential Construction for March on April 17. The report showed that privately-owned housing permits ticked up 1.6% month-over-month to a seasonally adjusted annual level of 1.48 million but remained essentially flat year-over-year. Housing starts slid 11.4% month-over-month to 1.32 million, but were 1.9% above their March 2024 level. Single family starts dropped steeply – down 14.2% month-over-month. Overall completions eased 2.1% month-over-month to a seasonally adjusted annual rate of 1.55 million, up 3.9% year-over-year. Single family completions rose just 0.9% over the same period.
The sharp pullback in starts, especially on the single‑family side, signals a cooling construction pipeline that should temper near‑term deliveries and gradually tighten for‑rent inventory, which is potentially helpful for owners who have been grappling with record deliveries in many Sun Belt metros. Modest permit growth shows developers remain selective rather than frozen, so groundbreakings could rebound once clarity on tariffs and financing costs improves, but any delay extends the window during which existing assets can push rents.
News
News to know
Just when the office market showed glimpses of stabilization with a major institutional investor declaring a bottom, the sector faces renewed challenges. Economic headwinds from trade tensions and recession concerns threaten the fragile recovery, particularly in urban markets, and are already dampening corporate appetite for additional space. While first-quarter leasing activity showed positive momentum, recently imposed tariffs risk triggering inflation that could further undermine development activity and derail the nascent recovery.
Trump signs executive orders on federal purchasing, office space | Bloomberg | April 14, 2025
President Trump issued a set of executive orders aimed at reshaping how the federal government uses office space and procures goods, with a focus on reducing spending. The orders encourage federal agencies to relocate from high-cost downtown and historic areas to more affordable locations, reversing site selection policies that date back to the Carter and Clinton administrations. According to Bloomberg, the General Services Administration will lead the effort, which includes cutting red tape around federal procurement and mandating the use of commercially available products. These moves follow broader cost-cutting efforts, including contract cancellations and workforce reductions, as the administration looks to address a backlog of over $17 billion in deferred maintenance on aging federal buildings.
BTR market hits record high with 39,000 homes completed | GlobeSt | April 14, 2025
The build-to-rent (BTR) market set a new record in 2024 with 39,000 single-family rental homes completed, marking a 15.5 percent increase from the previous year, according to Point2Homes. Over the past five years, the number of BTR homes has more than doubled to over 217,000, reflecting a structural shift in housing preferences. While the Southeast and Southwest continue to lead in BTR activity, states like Ohio, Utah, and California are seeing growing momentum. Demand is coming from a wide range of renters, including families priced out of homeownership, remote workers seeking space, and older adults looking for low-maintenance living. With another 110,000 units in the pipeline, BTR is expanding well beyond its traditional footprint and playing a larger role in the single-family housing landscape.
Apartment developers who overbuilt luck out with tariffs | Wall Street Journal | April 15, 2025
Following a historic wave of apartment deliveries, many multifamily developers are now benefiting from a slowdown in construction just as new tariffs on building materials take effect. More than 1.1 million units were completed in 2023 and 2024, according to Yardi Matrix, allowing much of the industry to sidestep rising costs tied to imports and labor shortages. With fewer new projects breaking ground, landlords expect upward pressure on rents, and some anticipate annual increases of up to 5 percent. While homebuilders face challenges from higher input costs and tightening labor supply, multifamily owners are positioned to capitalize on steady demand as high mortgage rates and economic uncertainty push more households to rent. In markets like Atlanta and Charlotte, incentives are beginning to ease, and developers say reduced competition could extend this period of rent growth.
Return-to-office mandates start to clock in | Commercial Property Executive | April 16, 2025
Return-to-office momentum continued to build in March, with office foot traffic improving across major U.S. cities even though it remained 32.2 percent below 2019 levels, according to Placer.ai. New York and Miami led the recovery, while Boston, Washington, D.C., and San Francisco showed the strongest year-over-year gains. In Phoenix, demand shifted toward urban offices near retail, with fewer lease deals but a notable increase in total square footage. In the Midwest, markets like St. Louis and Chicago are tightening, particularly for Class A space, as employers embrace in-person work and landlords invest in amenities to boost appeal. Across the country, corporate mandates, evolving tenant needs, and creative workplace strategies are shaping a gradual return to office environments.
U.S. office lending, sales volume rise year-over-year | ConnectCRE | April 17, 2025
Office lending is showing some promising signals of recovery, according to Avison Young. First-quarter 2025 office loan originations reached approximately $15.7 billion, putting the market on track to exceed 2024's total of $41 billion and 2023's $44 billion. The investment market is also showing some signs of positive momentum, with office property sales volume climbing to $7.8 billion in Q1, representing a 9.7% increase compared to the same period last year.
Research Spotlight
Catch the latest insights from the Altus team
Podcast | From volatility to opportunity – AEW’s Justin Pinckney on the CRE debt landscape
From interest rate volatility and sector-specific repricing to strategies across construction lending and senior housing, Justin Pinckney, CFA, Head of Private Debt at AEW, shares his expert perspective on balancing risk and opportunity in today’s CRE debt market.
Together with our host, Omar Eltorai, they also explore the case for standardized valuation benchmarks, results and findings from Altus Group's Q1 2025 Debt Capital Markets Survey, and how AEW is positioning itself for the next phase of the cycle.
US CRE Transaction Analysis – Q4 2024
Is the tide finally turning for US commercial real estate?
After a year of swinging expectations, high interest rates, and persistent caution, Q4 2024 delivered the strongest signs yet of a market beginning to stabilize.
Our latest insight article, ‘US CRE Transaction Analysis – Q4 2024’ breaks down the quarter and full year 2024 picture to answer what happened and what changed:
National transaction activity
Pacing and pricing trends
Regional and metro performance
Activity by property sector
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Wednesday, April 23
9:45AM: S&P Flash U.S. PMI, Data Release
10:0AM: New Home Sales, Data Release
Thursday, April 24
8:30AM: Durable Goods Orders, Data Release
Friday, April 25
10:00AM: Consumer Sentiment (Final), Data Release
Upcoming Industry Events
May 12 – May 14: ULI Spring Meeting
May 13 – May 14: RERI Annual Conference
May 18 – May 20: ICSC Las Vegas
May 18 – May 21: MBA Secondary and Capital Markets Conference
May 18 – May 21: MBA CRE Finance and Technology Conference
May 30 – May 31: AREUEA National Conference
About our research team
Omar Eltorai
Research Director
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.
