CRE This Week - What's impacting the United States market?
July 20, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of July 20, 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 June 2026 on July 8. The headline Optimism Index rose 2.1 points to 97.4, its largest monthly gain of the year, though it remained below the 52-year average of 98.0 for a fourth consecutive month. Seven of ten components improved, led by a 10-point jump in expected business conditions to a net 13% and an 8-point gain in real sales expectations to a net 9%. Inflation ranked as the single most important problem for the fourth straight month, cited by 21% of owners, the highest reading since October 2024, and a net 38% reported raising selling prices, the highest rate since January 2023. Earnings trends fell 5 points to a net -20%, and the average short-term loan rate declined to 7.4%, the lowest since October 2022, though only 22% of owners are borrowing regularly, 12 points below the long-run average.
The June rebound is almost entirely sentiment-driven. The soft components, business conditions and sales expectations, carried the index higher while hard data on actual earnings and sales volumes remained negative. That gap between mood and fundamentals is worth noting: owners are feeling better about where things are headed but operating performance has not followed. Labor quality jumping back to the second-most-cited problem, up 6 points from a multi-year low in May, adds another constraint on expansion activity heading into the second half of the year.
Consumer Price Index and Producer Price Index
The Bureau of Labor Statistics released June CPI on July 14 and PPI on July 15. Headline CPI fell 0.4% on a seasonally adjusted basis, the largest one-month decline since April 2020, pulling the year-over-year rate down to 3.5% from 4.2% in May. Core CPI was unchanged on the month and rose 2.6% year-over-year, its slowest annual pace since early 2025. Shelter inflation continued to ease, with the monthly gain of just 0.1% the smallest since January 2021. On the producer side, final demand PPI fell 0.3% in June after rising 0.6% in May, with the monthly decline driven entirely by a 6.4% drop in energy goods. Core PPI, excluding foods, energy, and trade services, edged up 0.1% and remains 5.1% above year-ago levels, while intermediate services inflation accelerated to 5.0% year-over-year, the fastest pace since February 2023.
Both headline prints were soft, but energy accounts for most of the relief on each side. Core inflation at the consumer level is genuinely improving, and shelter's deceleration aligns with what property-level rent data has reflected for over a year. The stickier signals are upstream: core producer prices and intermediate services both remain elevated, keeping input cost pressure relevant for construction feasibility and tenant operating margins. Food away from home at 3.4% year-over-year continues to squeeze restaurant and food-and-beverage operators. The overall picture is one of gradual disinflation with meaningful pockets of persistence, particularly in services.
The Federal Reserve released its July 2026 Beige Book on July 15, covering conditions through early July. Eleven of twelve Districts reported slight to moderate growth, consistent with the prior period. Consumer spending edged up but discretionary softness and trading-down behavior were widespread across income levels. World Cup activity provided a temporary boost to hospitality and tourism in several markets. Manufacturing grew modestly, led by data centers, defense, and machinery. Employment rose in five Districts and was flat in seven, with skilled labor shortages persisting across trades and technical fields. Prices increased moderately in nine Districts and at a robust pace in two, with energy costs tied to the Middle East conflict the primary driver of input cost pressure.
On the CRE side, the office market continued to bifurcate, with Manhattan seeing strong AI-related demand and Atlanta's Class A vacancy falling into single digits for the first time since 2020, while lower-tier space faced mounting debt maturity and receivership pressure. Multifamily split regionally, with New York rents edging higher on tight supply and Sun Belt markets still reporting elevated vacancy and concessions. Industrial demand was solid in most Districts but softer in Southern California. Data center construction remained the clearest growth driver across regions, though labor and supply chain constraints are slowing project timelines, and elevated construction costs continued to limit new starts outside well-capitalized projects.
The U.S. Census Bureau released June 2026 retail and food services sales on July 16. Total sales came in at $768.6 billion, up 0.2% from May, though the monthly change falls within the margin of error and is not statistically significant. Year-over-year, sales were up 6.7%, and the April through June period was up 6.4% from a year ago. May was revised slightly higher to +1.0% from +0.9%. Excluding autos and gasoline, sales rose 0.4% on the month and 5.7% year-over-year. Gasoline stations were the largest monthly drag, down 5.3%, consistent with the energy price decline seen in the June CPI. Nonstore retailers and motor vehicles were the primary offsets, each up roughly 1.9%.
These are nominal figures and not adjusted for inflation, so the 6.7% year-over-year headline overstates real spending growth with CPI running at 3.5%. Stripping out the gasoline effect, the underlying picture is one of modest but steady consumer activity. Food services were essentially flat on the month at +0.1%, consistent with the Beige Book's reports of value-seeking behavior and softer discretionary spending. The strong year-over-year comparisons in nonstore retail (+14.2%) reflect ongoing channel shift more than a surge in consumer demand.
Building Permits, Housing Starts, and the NAHB Housing Market Index
The Census Bureau and HUD released June 2026 residential construction data on July 17. Total housing starts rose 19.0% month-over-month to a SAAR of 1,427,000, though the gain carries a confidence interval of ±15.9% and is concentrated in multifamily. Single-family starts were essentially flat at 895,000 while 5+ unit starts came in at 513,000. Permits, a cleaner forward signal, fell 3.0% to 1,367,000, with single-family down 2.4% to 871,000, both below year-ago levels.
The NAHB HMI for July, released on July 16, fell two points to 34, the 27th consecutive month below 50, with buyer traffic at 23 and 37% of builders reporting price cuts averaging 6%. Given that the HMI is a reliable leading indicator for single-family starts, the current reading points to continued weakness ahead on that side of the market.
The more interesting read for CRE investors is what the HMI's buyer traffic reading of 23 signals about demand composition. At that level, the for-sale market is not simply slow; it is structurally failing to convert prospective buyers, which has implications for how long renter tenure stays elevated and where household formation pressure accumulates. Markets with thin multifamily pipelines and resilient employment bases are best positioned to benefit. Separately, the gap between the starts headline and the permit trend is worth watching for underwriting. Developers tempted to model a supply rebound based on June's jump may be getting ahead of what the forward indicators actually support.
The University of Michigan released preliminary consumer sentiment results for July on July 17, with the headline index rising to 54.4, up 9.9% from June's 49.5 and the highest reading since February. All five components improved, led by roughly 20% gains in buying conditions for durables and year-ahead business conditions. Gains were broad-based across income, age, wealth, and political affiliation, though sentiment remains down 11.8% year-over-year. Notably, more than 70% of interviews were completed before the U.S. resumed strikes against Iran on July 7, which has since pushed gas prices higher. Year-ahead inflation expectations eased to 4.2% from 4.6% but remain well above February's 3.4% reading, while long-run expectations held at 3.3%.
The rebound is largely fuel-driven, and if gas prices keep rising, July's gains may prove short-lived. The roughly 20% jump in durable goods buying conditions is worth watching for home furnishings and big-box retail, though if 4.2% inflation expectations are borne out, household purchasing power will stay constrained. A special featured chart in the release shows the sentiment gap between the top stockholder tercile, which skews wealthier, and households with no equity exposure at its widest in recent years. If that bifurcation holds, luxury retail, Class A multifamily, and experiential hospitality retain demand support from wealthier consumers, while value-oriented formats and workforce housing face a base that, despite this month's bounce, remains deeply negative on the economy.
News
News to know
News to know
CREFC's Second-Quarter 2026 Board of Governors Sentiment Index rose 0.9% to 101.0 from 100.1 in Q1, holding near the survey's 2017 baseline of 100.0 after Q1's 20.2% decline tied to the Iran war shock. Five of nine core questions improved, led by economic outlook, while four softened, led by borrower and investor demand moderating from Q1's elevated readings. Conducted June 25-July 6, the survey found neutral was the most common answer on seven of nine core questions, and views on interest rates remained the weakest reading for a second straight quarter. Commentary shifted from geopolitical shock toward regulatory capital and credit mechanics (bank back-leverage scrutiny, insurance capital treatment, multifamily conduit underwriting quality, and property insurance coverage gaps) alongside political uncertainty ahead of the midterms. CREFC's Lisa Pendergast called it "a market catching its breath."
The Americans striking It rich in the data-center buildout | Wall Street Journal, July 13, 2026
A group of 96 families in Salem Township, Pa. sold roughly 1,700 acres to a data center developer for $586 million, or about $330,000 per acre. A second assemblage of 200 landowners in an adjacent area is in process, with a potential deal valued at $1.3 billion. The broader assemblage effort was partly triggered by Amazon acquiring adjacent land for its own data center build-out. The land's appeal is tied to existing transmission infrastructure serving a nearby natural gas plant and nuclear facility, giving the site a meaningful power advantage over greenfield alternatives. The project is expected to include 12 buildings, over 1,500 construction jobs, and approximately 50 permanent positions per building. Power infrastructure access is emerging as a primary land value driver, much like highway adjacency shaped industrial land values in prior decades.
New York City's hotel sector leads the nation in occupancy at 84 percent, but that rate remains 3.5 percent below 2019 levels, according to the New York State Comptroller's annual industry study. Of 65 million total visitors in 2025, international arrivals accounted for just 12.5 million, down from 2024 and roughly 93 percent of pre-pandemic levels. The $333.71 average daily room rate sits below its inflation-adjusted pre-pandemic figure, and hotel employment of 45,325 workers is 13 percent below 2019 levels. On the supply side, NYC will add 4,852 new hotel rooms in 2026, leading the nation in new construction for the second consecutive year, with 24 additional projects totaling 5,778 rooms slated between 2026 and 2028. A new eight-year labor contract reached in May will increase hotel worker wages and benefits by 50 percent, adding a meaningful cost headwind for owners even as average worker salaries have already risen 25 percent since 2019 to $86,588.
Data center developers are increasingly tapping the green bond and sustainability-linked loan markets to finance AI infrastructure, partly to manage reputational and political risk from growing community opposition. Since late 2022, data center entities have issued $186 billion in sustainable debt, with 2025 marking the largest annual total on record, according to Sustainable Fitch. Community opposition blocked or stalled at least 48 projects valued at a combined $156 billion in 2025, and New York this week became the first state to impose a moratorium on new hyperscale data centers. Green debt is offering modest savings relative to conventional markets, described by one issuer as "a few" basis points, though analysts note investor scrutiny of sustainability claims is likely to intensify as power and water consumption continues to rise. The AI buildout is projected to require as much as $7 trillion in capital by 2030, making green debt one of several financing channels developers are tapping to meet that demand.
CRE maturities move from delays to decision time | Commercial Property Executive, July 15, 2026
The CRE loan maturity cycle is shifting from extensions toward actual resolution, as lenders grow less willing to grant time without new equity or a credible plan. The core problem is a proceeds gap: loans underwritten at 3.5 percent coupons once supported leverage of 70 to 75 percent of value, while today's 6.5 to 7.0 percent financing costs push senior sizing closer to 55 to 60 percent, often against a lower appraised value. Preferred equity, mezzanine debt, and private credit are bridging that gap for performing assets, with all-in costs running low-to-mid teens for cleaner situations and into the high teens for rescue capital. Where the gap is larger, resolution requires common equity accepting dilution or a new capital provider taking control. May CMBS remittance data showed $213 million in liquidations across 10 notes at an average loss severity of 71.9 percent.
Private wealth investors, including RIAs, family offices, and high-net-worth individuals, are allocating more capital to institutional-quality real estate as traditional 60/40 portfolios offer diminishing diversification benefits and fixed income remains correlated to equities. For real estate managers, the channel is becoming a more durable fundraising source as some institutions slow deployment to manage denominator-effect pressures. Multifamily, income-oriented strategies, and tax-advantaged structures tend to translate most naturally to private wealth investors given straightforward demand drivers and easier underwriting. The key friction points are illiquidity expectations, transparency around fees and valuations, and the education gap around fund structures, as many private wealth investors are newer to private markets than institutional counterparts.
Industrial rebound fuels new wave of speculative projects | Bisnow, July 16, 2026
Rising large-block requirements, stronger logistics demand, and federal manufacturing incentives are pulling speculative industrial development back into the pipeline. U.S. industrial space under construction grew 10% year-over-year to 312 million SF, with starts increasing in each of the last three quarters, per Colliers. National leasing activity rose 12% in Q2 versus the prior year, and net absorption hit 114 million SF in H1, the sector's strongest showing since 2023. Prologis broke ground on more new development in H1 2026 than in all of 2025, plans to end the year with $5 billion to $6.5 billion in total starts, and reported an 85% year-over-year jump in net earnings per share on $2.4 billion in Q2 revenue. Completions remain at a 12-year low at 44 million SF in Q2, per CBRE, and developers say they are watching early spec performance closely before committing additional capital.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Podcast | Credit conditions, consumer stress, and office finding a bottom
A couple of the largest US banks are releasing loss reserves on office loans. That’s not something we’ve been able to say for a while, and it’s one of several datapoints suggesting the CRE credit picture is improving.
In the latest CRE Exchange, Omar Eltorai and Cole Perry work through a packed week of data:
The June CPI headline was the biggest monthly drop since the pandemic, though most of it was energy and not broad-based disinflation
Consumer credit data show a pullback for the first time since 2024
The Fed meeting minutes revealed credit conditions splitting between large and small borrowers, with smaller sponsors facing a notably tighter environment
The WSJ economist survey shows inflation expectations rising even as recession odds fall
And early Q2 bank earnings point to office stress easing at some of the largest CRE bank lenders, even as data center financing draws more scrutiny
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, July 20
10:00 AM: Leading Indicators
Thursday, July 23
8:30 AM: Weekly Jobless Claims
11:00 AM: Kansas City Fed Survey
Friday, July 24
9:45 AM: US Flash Manufacturing PMI
9:45 AM: US Flash Services PMI
10:00 AM: New Home Sales
Upcoming Industry Events
July 15: IMN Distressed CRE West Forum (Dana Point, CA)
July 27 – July 30: NCREIF Academy Week at SMU (Dallas, TX)
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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