CRE This Week - What's impacting the United States market?
March 23, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of March 23, 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
The Bureau of Labor Statistics released the February 2026 PPI on March 18. Final demand PPI rose 0.7% month over month, above the 0.3% consensus, pushing the 12-month rate to 3.4%, the highest since February 2025. Goods prices jumped 1.1%, driven by a 48.9% surge in vegetable prices and broad energy gains. Services added 0.5%, with traveler accommodation up 5.7% and securities and investment advisory services up 4.2%. Core PPI rose 0.5% on the month and 3.5% annually, the tenth consecutive monthly advance.
Treasury yields moved higher on the release and futures markets pushed the next expected rate cut to at least December. The breadth of the report is the key concern: services inflation, which cannot be pinned on tariffs, accelerated alongside goods prices, pointing to broad-based rather than category-specific pressure. For CRE, the extended hold keeps borrowing costs elevated and cap rate compression limited across most property types. Rising energy and materials costs in the intermediate pipeline add further pressure on construction feasibility, compounding an already difficult financing environment heading into a year with a heavy loan maturity schedule.
The Federal Open Market Committee voted 10-1 on March 18 to hold the federal funds rate at 3.50% to 3.75%, with Governor Miran dissenting in favor of a 25-basis point cut. The statement characterized economic activity as expanding at a solid pace while noting that job gains remain low, inflation is elevated, and uncertainty around the Middle East conflict is high. The updated dot plot pointed to one cut in 2026 and another in 2027, with seven of 19 participants now signaling no cuts this year, up from six in December. The Summary of Economic Projections revised the Fed's 2026 Personal Consumption Expenditures inflation forecast up to 2.7% while nudging GDP growth slightly higher to 2.4%.
While long-term Treasury yields drive permanent financing costs, the fed funds rate still matters directly for CRE. Floating-rate bridge loans, construction facilities, and credit lines are all tied to short-term benchmarks, meaning borrowers carrying those instruments feel every hold in their debt service. More broadly, the dot plot shapes deal psychology: with the median now pointing to just one cut this year and seven members expecting none, the rate relief many buyers and borrowers were counting on to unlock deal flow is being pushed further out, extending the higher-for-longer environment at a particularly difficult moment given the active maturity wall and pending Fed leadership transition.
The U.S. Census Bureau and HUD released the New Residential Sales report for January 2026 on March 19, delayed from its original February 25 release date. New single-family home sales fell 17.6% from December to a seasonally adjusted annual rate of 587,000 units, and were down 11.3% year over year. The for-sale inventory edged up 0.4% to 476,000 units, representing 9.7 months of supply, up from 8.0 months in December and 9.0 months a year ago. The median sales price dropped to $400,500, down 4.5% from December and 6.8% below January 2025, while the average price fell to $499,500, off 5.9% month over month.
The January decline is sharp, though the wide confidence intervals warrant caution about the true magnitude of the move. Still, the directional signal is clear: elevated mortgage rates continue to constrain purchase activity, and builders are leaning harder on price concessions to compete, with the median price now nearly 7% below year-ago levels. The 9.7 months of supply is elevated by historical standards and points to ongoing inventory pressure that could weigh on new construction decisions. For multifamily, the continued softness in for-sale housing keeps the ownership-to-rental substitution dynamic intact, supporting occupancy in markets where new apartment supply has already begun to thin.
The Census Bureau released January 2026 wholesale trade data on March 19. Merchant wholesaler sales came in at $727.5 billion, up 0.5% from a revised December level and 7.5% above January 2025. Inventories fell 0.5% month over month to $909.3 billion, up just 1.0% year over year. The inventories-to-sales ratio tightened to 1.25 from 1.33 a year ago, the lowest reading in several years, as sales growth outpaced stockbuilding.
The lean inventory picture largely reflects the unwinding of the tariff-driven stockpiling cycle that defined much of 2025, when wholesalers built buffer stock ahead of anticipated duty increases. With those tariffs now embedded in costs, wholesalers have largely returned to moving product rather than hoarding it. However, the Supreme Court's February 20 ruling striking down the IEEPA tariffs (and the administration's subsequent pivot to a 10% global tariff under Section 122) reintroduces policy uncertainty that could trigger another front-loading cycle. If importers resume stockpiling in response to the shifting tariff framework, near-term demand for bulk distribution and warehouse space could see a temporary lift. For now, the tighter inventory-to-sales ratio limits the case for incremental industrial leasing, but the trade policy environment warrants close attention heading into the spring.
News
News to know
Industrial outdoor storage sites with excess electrical capacity are emerging as a distinct investment category, driven by demand from EV charging operators, autonomous vehicle fleets, edge data centers and advanced manufacturing tenants. A JLL analysis found that sites in Silicon Valley capable of delivering roughly 4,000 amps or more are commanding 49% rent premiums over standard industrial leases. J.P. Morgan Asset Management reported tenants paying 20 to 30% premiums for turnkey powered sites, with absorption rates above 99%. Catalyst Investment Partners, which owns roughly 140 IOS properties on the East Coast, launched a $400 million equity fund in February and expects autonomous vehicle and EV-focused acquisitions to be a significant share of its strategy. Cap rates for IOS currently sit 50 to 150 basis points above traditional industrial but are compressing as supply tightens. The trend is accelerating institutionalization of the broader IOS sector, with J.P. Morgan, Clarion Partners and Peakstone Realty Trust among those increasing allocations. Industry analysts project edge and inference data center traffic from AI applications will grow 25% between 2024 and 2027, adding another source of competition for powered, industrially zoned land near population centers.
To bring employees back to office, understand attendance drivers | Connect CRE, March 16, 2026
A Placer.ai white paper finds office attendance has reached a post-pandemic high, but growth is slowing, suggesting return-to-office progress will be gradual. Key findings: attendance is increasingly seasonal, peaking in late spring and summer, which should inform leasing strategies and downtown retail planning. Tuesdays and Wednesdays consistently draw the highest attendance, making midweek the best anchor for collaboration and programming. Monday attendance correlates closely with commute ease. The paper recommends employers and building owners align strategies around these patterns rather than relying on mandates, which have often faced pushback.
Trump targets mortgage, construction issues in executive orders | The Real Deal, March 16, 2026
President Trump signed two executive orders targeting housing affordability ahead of midterm elections. The first directs bank regulators to ease mortgage issuance rules for community banks, loosening capital requirements, modernizing appraisal rules, and expanding Federal Home Loan Bank access. The Federal Housing Finance Agency director said the move could reduce mortgage rates by up to half a percentage point. The second order pushes federal agencies to incentivize state and local governments to cut permit red tape and accelerate housing construction. Both orders complement the recently Senate-passed 21st Century ROAD to Housing Act, which still needs House reconciliation.
Service-oriented tenants leased just over 50% of total retail square footage in 2025, surpassing goods-based retail for the first time, according to CoStar. Fifteen years ago, service tenants accounted for only 40% of leasing. Wellness and fitness are leading the shift, with fitness centers making up nearly 30% of service-based leases last year, up from 20% in 2016. The U.S. wellness market totaled $2.1 trillion in 2024, spanning spas, beauty, nutrition and related categories. Planet Fitness added more than a million members last year and plans to open nearly 200 new locations in 2026, often backfilling space left by bankrupt retailers like Rite Aid and Joann. E-commerce, which reached 16.4% of total retail sales last year, continues to reduce the physical footprint needed by goods-based retailers. Despite the compositional shift, U.S. retail vacancy remains near record lows at 4.4%, supported by strong service-tenant demand. Shopping center owner Brixmor cited an example of subdividing a vacated liquor store into four service tenants, generating 20% higher rent with stronger foot traffic.
Industrial outdoor storage surges into stardom | Commercial Property Executive, March 17, 2026
Industrial outdoor storage vacancy averaged 2.5% in Q4 2025, compared to 6.7% for traditional industrial, as restrictive zoning and local opposition continue to limit new supply. IOS rents averaged $13.14 per square foot, a 17.9% premium over traditional industrial at $10.85 per square foot, with that gap widening year-over-year. Demand is being driven by growth in manufacturing, domestic energy production, and infrastructure spending, where outdoor storage offers cost-effective proximity to logistics corridors without the overhead of warehouse space. Top markets for rent premiums skew toward secondary logistics hubs including Kansas City, Indianapolis, Charlotte, and Cincinnati, while Kansas City, Los Angeles, Savannah, Columbus, and El Paso are flagged as emerging IOS markets.
Commercial real estate fundraising on the rise for first time since 2021 | Bisnow, March 18, 2026
Global private real estate fundraising rose 13% in 2025 to $172 billion, its first year-over-year increase since 2021, though the report cautions that a return to 2021-2022 peak levels is unlikely given persistently elevated borrowing costs. Nearly 90% of capital raised went to opportunistic, value-add, and debt strategies, reflecting continued caution around core assets. The 10 largest funds accounted for $68 billion of the total, underscoring a widening gap between scaled platforms and smaller managers, with just two funds capturing more than half of the $4.2 billion raised by new entrants through Q3. On the debt side, banks originated close to 60% of maturing CRE mortgages in 2025, but their share is expected to decline as large institutions reduce CRE exposure, with bank loan maturities projected to peak at $387 billion in 2029 before pulling back.
What’s driving all the REIT mergers? | Multi-Housing News, March 19, 2026
REIT consolidation is accelerating as valuation gaps between scaled platforms and smaller public REITs trading at discounts to NAV draw in well-capitalized private buyers. Of the 155 U.S. equity REITs, roughly half carry market caps below $2 billion, making them cost-of-capital-disadvantaged targets. Take-private activity involving public REITs totaled around $6 billion in 2025, with several additional deals announced in early 2026. Participants cite stabilizing debt markets, acceptance of a 4 to 4.5 percent 10-year Treasury as a new baseline, and AI-driven operational efficiencies as structural forces reinforcing the case for scale, while foreign buyers and family offices remain active acquirers of long-duration assets.
Robots need offices too: The AI boom comes to NYC real estate | Bloomberg, March 19, 2026
AI companies and legacy tech firms pushed New York City office leasing to its strongest year since 2014 in 2025, according to Savills. AI firms added roughly 1 million square feet across Manhattan last year, a 152% increase year-over-year, and are seeking an additional 1.4 million. Legacy tech firms contributed another 2.1 million square feet. AI tenants paid an average of $88 per square foot, above the citywide average of $78, with some deals reaching $210. Tech firms accounted for about 15% of office leasing in 2025, second only to financial services at 36%, and represented nearly one-third of the top 20 largest leases. Notable transactions include Harvey AI taking 185,000 square feet at One Madison Ave and OpenAI leasing 90,000 square feet in SoHo. New York now holds more than 9% of the country's AI workforce, and tech employment in the five boroughs has grown 12% since 2020, with an additional 13% projected by 2029.
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 23
10:00AM: Construction Spending (Jan.)
Tuesday, March 24
8:30AM: U.S. Productivity (Q4)
9:45AM: S&P Flash U.S. Services PMI (Mar.)
9:45AM: S&P Flash U.S. Manufacturing PMI (Mar.)
Wednesday, March 25
8:30AM: Import Price Index (Feb.)
Friday, March 27
10:00AM: Consumer Sentiment (Mar.)
Upcoming industry events
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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