CRE This Week - What's impacting the United States market?
March 16, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of March 16, 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 February on March 10. The headline Optimism Index fell 0.5 points to 98.8, the second consecutive monthly decline, but still slightly above the 52-year average of 98. Earnings trends improved 7 points to a net negative 14%, the best reading since December 2021, but that was more than offset by an 8-point drop in expected real sales and a 4-point decline in hiring plans to a net 12%, the lowest since May 2025. Job openings rose 2 points to 33%, though 46% of owners trying to hire reported few or no qualified applicants. The Uncertainty Index fell 3 points to 88. Capital spending plans held flat at 18%, a historically weak level. Actual price increases slowed for the third straight month, with a net 24% raising selling prices. Taxes ranked as the top problem at 19%, while poor sales rose 2 points to 11%.
The pullback in sales expectations and hiring plans signals fading expansion appetite among small businesses, a key demand source for neighborhood retail, smaller office space, and light industrial. Flat capital spending plans and the continued rise in poor sales as a top concern suggest limited near-term leasing momentum from this segment. On the positive side, easing price pressures and a drop in average short-term borrowing rates to 8.2% from 9.1% in January provide some cost relief for small business tenants. But with forward-looking indicators softening, the data argue for caution in underwriting tenant health and rent growth in small business-heavy locations.
The National Association of Realtors reported on March 10 that existing home sales rose 1.7% in February to a seasonally adjusted annual rate of 4.09 million units, beating the consensus estimate of 3.89 million and partially recovering from January's 8.4% weather-driven drop. Sales were still down 1.4% year over year. Monthly gains were concentrated in the Midwest, South, and West, while the Northeast declined. The median price edged up 0.3% year over year to $398,000, the 32nd consecutive month of annual increases but among the slowest pace of appreciation in recent years. Inventory rose 4.9% from a year ago to 1.29 million units, or 3.8 months of supply. First-time buyers made up 34% of transactions, up from 31% in both January and a year ago. NAR's Housing Affordability Index climbed to 117.6, its highest since March 2022, as wage growth continues to outpace home price appreciation.
The February rebound suggests January's decline was largely weather-related, but the broader picture remains one of a housing market operating well below potential. Sales are still 1.4% below year-ago levels despite improving affordability and roughly 6 million more jobs than in 2019, pointing to persistent structural constraints around inventory and rate sensitivity. For CRE, the for-sale market is not pulling renters away in meaningful numbers. With transaction volumes far below pre-pandemic norms and homeownership still out of reach for many households, multifamily demand should remain supported, particularly where the buy-versus-rent gap favors leasing. Slowing home price growth gradually improves affordability, but is unlikely to shift the calculus without a more decisive drop in mortgage rates. The tepid sales pace also limits downstream activity in home improvement retail and housing-related consumer spending.
Consumer Price Index and the Personal Consumption Expenditures Price Index
The Bureau of Labor Statistics released the Consumer Price Index (CPI) for February 2026 on March 11, followed by the Bureau of Economic Analysis's Personal Income and Outlays report for January 2026 on March 13 (delayed from February 26 due to the fall 2025 government shutdown). Headline CPI rose 0.3% month over month and 2.4% year over year, matching January and consensus. Core CPI increased 0.2% monthly and 2.5% annually. Shelter rose 0.2%, with rent of primary residence up just 0.1%, the smallest monthly gain since January 2021. Year over year shelter costs were up 3.0%, the slowest pace in over four years.
The PCE report showed personal income up 0.4% in January, disposable income up 0.9%, and personal consumption expenditures up 0.4%. Real PCE gained just 0.1%. The headline Personal Consumption Expenditures (PCE) price index rose 0.3% monthly and 2.8% year over year, while core PCE increased 0.4% on the month and 3.1% annually, up from 3.0% in December. The personal saving rate rose to 4.5% from 3.6%. Services spending drove the consumption increase, up $105.7 billion, while goods spending fell $24.6 billion.
The two prints send different signals. CPI continues to ease, with shelter deceleration keeping headline readings near the low 2s. Core PCE, however, reaccelerated to 3.1% year over year, well above the Fed's 2.0% target and the December SEP projection of 2.5% for year-end 2026, giving the FOMC little reason to cut at its March 18 meeting. Markets price near certainty of a hold, with the first cut not expected until September. Treasury yields moved higher following both releases, with the 10-year back above 4.20%.
For CRE, the slowdown in shelter inflation, particularly rent of primary residence at 0.1% monthly, suggests multifamily supply is pulling measured rent growth lower and reducing the risk that rates stay elevated on housing costs alone. But the hotter core PCE reading complicates the borrowing cost outlook. With the fed funds rate at 3.50% to 3.75% and no near-term cut in sight, financing conditions are unlikely to ease meaningfully in the first half of the year. The rise in the saving rate to 4.5% points to a more cautious consumer, which could weigh on retail and hospitality demand. Neither release captures the recent surge in oil prices tied to the conflict with Iran, meaning energy cost pressures will not appear until the March or April data, adding uncertainty for construction costs, tenant expenses, and consumer purchasing power.
The Census Bureau and HUD released the January 2026 New Residential Construction report on March 12, delayed from its original February 18 date due to the federal funding lapse. Housing starts rose 7.2% to a SAAR of 1.487 million, up 9.5% year over year, driven by a surge in multifamily starts to 524,000. Single-family starts fell 2.8% to 935,000. Building permits moved in the opposite direction, declining 5.4% to 1.376 million and down 5.8% from January 2025. Single-family permits edged down 0.9% to 873,000. Completions rose 4.8% month over month to 1.527 million but were 7.5% below year-ago levels, with single-family completions slipping 1.0% to 970,000.
The headline starts figure looks strong, but was driven by volatile multifamily activity rather than broad-based momentum. Single-family starts and permits both declined, consistent with builder caution around elevated mortgage rates and weak buyer traffic. The 5.8% year-over-year drop in total permits points to a thinning forward pipeline, which should support the homeownership affordability gap that continues to funnel households into rental housing. Multifamily completions above 500,000 annualized will keep near-term pressure on rents and concessions in supply-heavy markets, but with permits well below the levels that drove the 2022 to 2024 construction wave, the delivery pipeline should ease meaningfully by late 2027, setting up a better outlook for apartment fundamentals on the other side.
The Bureau of Economic Analysis released its second estimate for Q4 2025 real GDP on March 13, delayed from late February due to the fall government shutdown. Growth was revised down sharply to 0.7% annualized from the 1.4% advance estimate, driven by downward revisions to exports, consumer spending, government spending, and investment. Real final sales to private domestic purchasers grew 1.9%, down 0.5 percentage points from the prior reading. The gross domestic purchases price index accelerated to 3.8%, revised slightly higher. BEA continues to estimate the shutdown subtracted roughly 1.0 percentage point from headline growth. For the full year 2025, real GDP grew 2.1%, down from 2.8% in 2024.
The headline revision to 0.7% overstates the weakness, but the downward move from 1.4% is not something to dismiss. Real final sales to private domestic purchasers at 1.9%, revised down half a point, show that private demand is intact but clearly losing momentum, not just adjusting for shutdown noise. Consumer spending on services was the biggest source of the revision, led by health care, which is less directly tied to CRE leasing decisions but does signal that the broader growth engine is cooling. For property markets, the read is that tenant demand likely has a floor but may not have much upside in the near term. Expansion-driven leasing and new space commitments may be slow to accelerate in an economy growing below 2%, and borrowers facing maturities this year have less room to point to improving fundamentals when negotiating with lenders.
University of Michigan Consumer Sentiment Index
The University of Michigan released the preliminary Consumer Sentiment Index for March on March 13. The headline index fell to 55.5 from 56.6 in February, slightly above the consensus estimate of 55.0 but the weakest reading since December. Current conditions improved to 57.8 from 56.6, while expectations dropped sharply to 54.1, the lowest since November. Year-ahead inflation expectations held at 3.4%, and five-year expectations edged down to 3.2% from 3.3%. Declines in personal financial expectations were broad-based across income, age, and political affiliation, falling 7.5% nationally. Interviews conducted before the U.S. military action in Iran showed improving sentiment, but responses in the nine days following erased those gains entirely.
The March reading extends what has become a chronically low-sentiment era. Outside of the pandemic shock in mid-2020, the index has not sustained levels this low since the worst months of the Global Financial Crisis in 2008 to 2009, but unlike those episodes, today's weakness reflects a more diffuse set of concerns with no single catalyst and no clear path to resolution. The broad-based decline in personal financial expectations across income, age, and political lines suggests this is not confined to one segment of the population. For CRE, the practical consequence is a consumer that continues to spend but resists new commitments, a pattern that favors necessity-driven retail and essential services while weighing on discretionary categories, experiential hospitality, and higher-end apartment leasing. Sentiment at these levels historically coincides with cautious investor positioning and wider risk premiums.
News
News to know
How will the Iran conflict affect US CRE? | Commercial Property Executive, March 9, 2026
Industry experts told Commercial Property Executive that a prolonged conflict in Iran could pressure U.S. commercial real estate through higher oil prices, rising inflation, and unstable interest rates. In the near term, a flight to safety into Treasuries could lower yields but also reduce capital allocated to riskier CRE acquisitions, slowing transaction activity. If the conflict extends, higher energy costs would raise operating and construction expenses, potentially widening cap rates and compressing property valuations. Lenders would likely tighten underwriting and widen loan spreads, reducing availability for acquisitions, refinancing, and development. On the upside, industrial could benefit from expanded domestic military production, and hospitality may see a lift as travelers shift from international to domestic trips. Both experts agreed a short disruption would have limited impact, but a multi-month conflict would meaningfully weigh on capital markets, investor sentiment and deal flow.
A new generation of mall rats has arrived | Wall Street Journal, March 9, 2026
Gen Z shoppers are driving a revival in mall foot traffic, with 18 to 24-year-olds making 62% of their general merchandise purchases in stores in 2025, compared with 52% for those 25 and older, according to Circana. NielsenIQ projects Gen Z's global annual retail spending will exceed $12 trillion by 2030. Mall owner Macerich is redesigning common areas to be social media-friendly and courting online-native retailers popular with younger shoppers. Brands like Edited, which launched online in 2021, now operate 11 physical locations and plan to open 14 more this year. Tapestry, parent of Coach and Kate Spade, posted double-digit in-store sales growth last quarter, driven largely by Gen Z, while Pacsun grew its store count in 2025 for the first time in 18 years. The trend is a bright spot for mall landlords after years of closures and declining traffic, as younger consumers prioritize the in-person experience over online convenience.
CRE distress rate falls slightly to 11.6% in February | Commercial Observer, March 10, 2026
CRED iQ reported that the overall CMBS distress rate, which includes delinquent and specially serviced loans, edged down to 11.63 percent in February from a cycle high of 11.98 percent in January. The delinquency rate alone slipped to 9.31 percent from 9.4 percent, still more than triple the 2.93 percent recorded in July 2022 when the current distress wave began. While the modest decline may offer a data point for optimists, it is too early to call it a trend reversal heading into the spring lending season.
Underallocated investors eye CRE as market dynamics shift | GlobeSt.com, March 10, 2026
Institutional investors are increasingly looking at commercial real estate after several years of underperformance, with many now sitting roughly 90 basis points below their target allocations, according to the Hodes Weill Real Estate Allocations Monitor. LaSalle's Jen Wichmann told GlobeSt that the downturn was primarily capital markets driven rather than fundamentals driven, and that current valuations appear fair relative to bond market signals. Green Street data show overall CRE values remain 16% below their April 2022 peak, with office down 35%. The PREA forecast calls for 1% appreciation in 2026. Refinancings continue to account for an outsized share of loan origination volume, exceeding 60% since 2023, and LaSalle expects that dynamic to persist through 2026 until a stronger recovery in property values motivates more dispositions. Wichmann noted that while lower interest rates would help, they are not a prerequisite for drawing more capital into CRE, and that improving debt markets and equity flows should support further transaction growth into 2027.
Backlog rebounds, remains lopsided across construction | Construction Dive, March 11, 2026
Construction backlog rose to 8.1 months in February from a four-year low the prior month, but gains were heavily skewed toward large firms and data center builders, according to Associated Builders and Contractors. Contractors with over $100 million in revenue reported 12.1 months of work, and those with data center contracts had 11.2 months, while firms without AI-related builds sat at just 7.6 months. The Middle States was the only region to post a year-over-year increase. ABC's Construction Confidence Index showed contractors still expecting growth in sales and staffing, though ABC chief economist Anirban Basu warned that rising oil prices tied to the conflict in Iran could compress margins and weigh on demand outside of data center work.
Banks quietly return to retail CRE lending | GlobeSt.com, March 12, 2026
Banks are gradually re-entering CRE lending after years of pullback, with retail properties among the first to benefit. S&P Global data show 11 of 18 U.S. banks with over $1 billion in retail loans reported higher balances through 2025. Grocery-anchored properties have been a standout, with strong performance and growing borrower demand. Private credit has filled much of the gap left by banks, but underlying banking fundamentals are notably stronger than in prior cycles, with tangible equity at 9% versus 3% during the financial crisis. Some banks are also lending to private credit funds in senior positions, limiting their own loss exposure. The shift reflects a measured return rather than aggressive re-entry, supported by solid retail fundamentals and limited new supply.
REITs are a safe place to hide from Iran and AI | Barrons, March 13, 2026
REITs are emerging as a defensive play in 2026, with a major real estate sector ETF up nearly 4.5% year to date while the S&P 500 has declined more than 2%. Portfolio managers cite a favorable setup: inflation supports property values and rental income, while expectations for resumed Fed rate cuts later this year could further boost dividend appeal. The average yield across the sector ETF sits at 3.3%. Wireless infrastructure REITs are drawing interest as AI buildout beneficiaries, while senior living REITs remain a favored demographics play tied to aging population trends. Apartment and logistics REITs are also attracting capital, given long lease durations and cash flow visibility, with managers noting their distance from more cyclical sectors like retail, hotels, and office. Despite the year to date rally, major REIT ETFs still trade at 16 to 18 times forward earnings, well below the S&P 500's nearly 22 times multiple.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | The 70s are calling, are the CRE markets listening?
Lenders are back. Origination activity is up. And yet the data is raising some familiar questions.
Rising operating expenses are outpacing rent growth in select segments, the wall of maturities is being worked through slowly with extensions still common, and the macro backdrop: slowing job creation, changes in demographics, and consumer stress, is changing the math for a capital-intensive industry.
In this episode, Brian Bailey, 14 years as the Federal Reserve's CRE subject matter expert, now Head of Research at Trimont, digs into what $700 billion in serviced loans is revealing about where the market actually stands. Stream the full episode!
Article | 2025: Year of the CRE rebound
2025 was the first year since 2021 where prices, deal counts, deal sizes, and building sizes all rose together, a genuinely broad-based recovery, not just a pricing story. Still, compared to 2019, 2025 saw 15% fewer properties sold, meaning the recovery has been price-led, not volume-led. Our own Cole Perry breaks it down.
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, March 16
8:30AM: Empire State Manufacturing Survey (Mar.)
9:15AM: Industrial Production (Feb.)
9:15AM: Capacity Utilization (Feb.)
Tuesday, March 17
10:00AM: Pending Home Sales (Feb.)
10:00AM: Home Builder Confidence Index (Mar.)
Wednesday, March 18
8:30AM: Producer Price Index (PPI) (Feb.)
10:00AM: Factory Orders (Jan.)
Thursday, March 19
8:30AM: Philadelphia Fed Manufacturing Survey (Mar.)
10:00AM: Wholesale Inventories (Jan.)
10:00AM: New Home Sales (Jan.)
Friday, March 20
8:30AM: Employment Cost Index (Q4)
Upcoming industry events
March 16 – March 19: NCREIF Spring Conference (Scottsdale, AZ)
March 24 – March 27: ARES Annual Conference (Sandestin, FL)
March 24 – March 26: NAREIT REITwise (Hollywood, FL)
March 24 – March 26: Shoptalk Spring (Las Vegas, NV)
March 26 – March 27: PREA Spring Conference (Nashville, TN)
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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