CRE This Week - What's impacting the United States market?
March 2, 2026 - US commercial real estate news, macroeconomic indicators and market analysis.
Week of March 2, 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
S&P Case-Shiller Home Price Index
S&P Dow Jones Indices released the S&P Cotality Case-Shiller Home Price Indices for December 2025 on February 24. The national index rose 1.3% year over year, the weakest full-year gain since 2011 and 5.3 percentage points below the 10-year average. The 20-City Composite increased 1.4% annually, and the 10-City Composite rose 1.9%. Full-year 2025 was a story of two halves: prices rose 2.6% through June but fell 1.3% over the back half, with all 20 metros posting negative returns in that period. Chicago (+5.3%), New York (+5.1%), and Cleveland (+4.0%) led for the year, while Tampa (-2.9%), Denver (-2.1%), Phoenix (-1.5%), Dallas (-1.5%), and Miami (-1.5%) posted the steepest declines. S&P noted that inflation outpaced home price appreciation from June onward, turning real returns negative for the first time in over a decade.
Real housing wealth erosion could continue to weigh on consumer confidence and spending through 2026. For multifamily, elevated mortgage rates and tight resale inventory continue to keep homeownership out of reach for many households, supporting rental demand even as nominal price growth slows. The regional split matters: Midwest and Northeast markets with rising prices tend to have thinner construction pipelines, sustaining both home values and rental demand, while Sun Belt markets experiencing price corrections are also absorbing the heaviest multifamily deliveries, compounding pressure on both for-sale and rental fundamentals.
The U.S. Census Bureau released the Monthly Wholesale Trade report for December 2025 on February 24, delayed from its original February 9 date due to the fall federal funding lapse. Wholesale sales rose 1.0% month over month to $722.1 billion, following a revised 1.4% gain in November, and were up 5.2% year over year. Durable goods sales led at 1.7%, while nondurables rose 0.4%. Total inventories edged up 0.2% to $918.0 billion, a third straight month of modest gains, and were up 2.9% from December 2024. The inventories to sales ratio fell to 1.27, down from 1.28 in November and 1.30 a year ago. For full-year 2025, wholesale sales totaled $8.44 trillion, up 4.8% from 2024. These figures are not adjusted for price changes.
The December data show sales outpacing inventory accumulation for a second straight month, compressing the I/S ratio to 1.27, its lowest level since early 2024. The 2.9% year-over-year rise in inventories points to a gradual restocking cycle that should support near-term demand for warehouse and distribution space, though the modest pace suggests distributors are rebuilding selectively rather than broadly. Leaner inventory management and faster turnover favor well-located, modern logistics facilities over older, less efficient spaces. The strength in wholesale sales activity is consistent with the steady private demand seen in Q4 GDP data, even as real consumer spending growth showed signs of cooling into year-end.
The Conference Board released the Consumer Confidence Index for February on February 24. The headline index rose 2.2 points to 91.2, beating the 87.1 consensus and breaking a record six-month losing streak, though it remains well below the November 2024 peak of 112.8. The gain was driven entirely by expectations: the Expectations Index rose 4.8 points to 72.0 but marked the 13th straight month below the recession-warning threshold of 80. The Present Situation Index fell 1.8 points to 120.0, the lowest since February 2021. The labor market differential improved modestly to +7.4%.
The headline beat masks a still-cautious consumer. Present conditions are at a five-year low, and expectations are stuck below 80 points due to limited appetite for major financial commitments. Write-in responses skewed negative, led by mentions of prices, inflation, trade, and politics. Big-ticket purchase plans rose, but homebuying intentions were flat, and service spending plans softened, with consumers favoring necessities over discretionary categories. For CRE, the gap between how consumers view today versus six months from now complicates the leasing outlook, particularly for tenants in discretionary and experiential formats. Flat homebuying intentions continue to extend renter tenure, supporting multifamily occupancy, though weakening sentiment among older and higher-income households could limit rent growth in Class A product.
The Bureau of Labor Statistics released the January 2026 PPI on February 27. Headline PPI rose 0.5% month over month, the largest gain since September, and 2.9% year over year. Core PPI (excluding food and energy) accelerated to 3.6% annually. Both monthly readings came in well above the 0.3% consensus. Services drove the headline, rising 0.8%, while final demand goods fell 0.3% as gasoline dropped 5.5%. Core goods still rose 0.7%, and metal prices jumped 4.8%. The index for final demand less foods, energy, and trade services increased 0.3%, its ninth straight monthly advance.
The hot print reinforces that pipeline price pressures remain well above the Fed's comfort zone, limiting scope for near-term cuts from the current 3.50% to 3.75% range. The 10-year Treasury yield dipped below 4% on the release, but the move was driven by a flight to safety as equities sold off on stagflation fears, not by improved inflation expectations. That distinction matters for CRE, since lower long-term rates rooted in recession risk point to weaker tenant demand and more cautious lenders, not better underwriting conditions. Borrowing costs are likely to remain restrictive through mid-year, with any relief in yields reflecting deteriorating growth rather than genuine easing.
The U.S. Census Bureau released the Value of Construction Put in Place report for November and December 2025 simultaneously on February 27, delayed due to the fall federal funding lapse. Total construction spending in December was estimated at a seasonally adjusted annual rate of $2,168.8 billion, up 0.3% from November but down 0.4% year over year. Private construction rose 0.5% on the month to $1,647.1 billion, led by a 1.5% gain in residential spending, while private nonresidential slipped 0.7% to $730.9 billion. Public construction edged down 0.5% to $521.7 billion. For full-year 2025, total construction spending was $2,164.4 billion, down 1.4% from 2024, with private construction off 2.9% and public construction up 3.6%.
Private nonresidential construction fell 3.1% to $742.4 billion in 2025, marking the first full-year decline since 2020. The contraction reflects fading momentum from CHIPS and IRA-era manufacturing projects alongside elevated rates, tariff-driven material costs, and tighter construction lending across commercial property types. For CRE, the shrinking pipeline is a supply-side positive: less new inventory over the next 12 to 24 months should help support occupancy and rent growth, particularly in industrial and multifamily. With borrowing costs unlikely to ease meaningfully in the near term, construction activity is likely to remain subdued, reinforcing the view that this cycle's recovery will be led by tightening supply rather than accelerating demand.
News
News to know
Lenders committed an estimated $121.91 billion in credit for U.S. data center properties in 2025. The average loan was $1.2 billion, but the median was only $40 million, indicating large banks are benefiting disproportionately. Financing methods include credit facilities, asset-backed securities, CMBS, and industrial revenue bonds. A $6.92 billion loan to QTS Realty Trust involved 11 lenders. Switch issued about $3.5 billion in ABS out of a $15 billion facility. Arizona, Illinois, and Texas led states by loan volume. A massive project in New Mexico's Doña Ana County envisions up to $165 billion in investment over 30 years.
ICE's $38B warehouse buying spree enriches developers as outcry grows | Bisnow, February 23, 2026
DHS plans to spend $38.3 billion acquiring industrial buildings for conversion into immigration detention centers, having already purchased at least eight properties across six states for a combined $700 million. Many sellers are receiving significant premiums over recent purchase prices or appraised values. ICE is targeting vacant spec warehouses in a market with a record 1.5 billion square feet of available space. However, at least eight additional deals have collapsed after bipartisan pushback from local officials citing infrastructure strain and community opposition.
Multifamily lending enters new phase of stress | GlobeSt.com, February 24, 2026
Multifamily loan delinquencies at community, commercial, and savings banks reached 1.37% as of Q3 2025, the highest level since the post-financial-crisis recovery era. Serious delinquencies of 90 or more days past due now account for roughly $7.1 billion in stressed exposure. Loss rates climbed to $911 million in Q3 2025, nearly double the $504 million reported a year earlier. The deterioration is accelerating faster than during the 2008 crisis cycle, driven by higher floating-rate exposure, rapid cap-rate expansion, and value declines concentrated in specific markets and loan vintages.
Austin rents are projected to flatten or rise this year after at least 10 quarters of declines. The city's apartment delivery pipeline is shrinking fast, with just under 9,000 units expected in 2026, 72% below the 2024 peak. Population growth remains strong, fueled by tech, biomedical, and government jobs, and vacancy rates declined last year for the first time since 2021. Investors are returning, with transaction volume up 18% annually. Austin's turnaround is seen as a leading indicator for the broader Sunbelt, where cities like Nashville and Phoenix are still absorbing oversupply.
SoCal's data center capacity to double in next few years | Commercial Observer, February 24, 2026
Southern California's data center supply is expected to roughly double in the coming years despite significant regulatory and cost barriers, according to JLL. The market currently has just 335 megawatts of capacity, among the smallest in North America, but nationwide vacancy near 1% is drawing developer interest. California's permitting framework remains a key constraint, with state-level oversight required for projects exceeding 50 megawatts, and electricity costs averaging 18 cents per kilowatt hour, more than double rates in Texas and Northern Virginia. Most projects are sized just below regulatory thresholds to avoid lengthy approval processes. Proposed state legislation, including a partial sales tax exemption for sustainably powered projects, could help improve feasibility.
The Supreme Court ruled 6-3 that Trump's use of IEEPA to impose global tariffs was unconstitutional, but the decision's impact on CRE appears muted. Trump quickly announced a 15 percent blanket tariff under separate legal authorities, while duties on steel, aluminum, and semiconductors remain in effect. Markets barely reacted, with the 10-year Treasury holding near 4 percent. CRE reactions were mixed, with some seeing relief on input costs and others flagging renewed uncertainty around capital spending. Industrial was cited as the most exposed sector, though U.S. industrial leasing still rose 12 percent in 2025 to 941 million square feet. Economists noted tariff revenue was modest relative to the broader economy, and that construction cost pressures stemmed more from immigration-driven labor shortages than import duties. The USMCA review in July 2026 and broad Section 301 authority suggest trade policy uncertainty will linger.
Out-of-town buyers now account for nearly 62 percent of online home views across the 100 largest U.S. metros, up from 48.6 percent in 2019, according to a Realtor.com analysis of Q4 2025 data. The Southeast drew the highest share of non-local interest at 64.6 percent, with Cape Coral, Lakeland, Durham, Sarasota, and Poughkeepsie leading. Only 13 large metros were still dominated by local buyers, including New York, Chicago, Dallas, Atlanta, and Washington, D.C., though local engagement has declined in all of them since 2019. The biggest shifts from local to out-of-town interest occurred in San Francisco, Philadelphia, Pittsburgh, Omaha, and Detroit, all five of which are experiencing growth in AI-related jobs, data center expansion, and power infrastructure investment.
INSIGHTS Spotlight
Catch the latest research and insights from Altus
Report | Q4 2025 US CRE investment and transactions quarterly
Q4 transaction volume reached $179.9 billion, up 20.2% year-over-year with industrial surging 54% annually to $44.9 billion. 2025 marked the first annual increase in transaction count since 2021, and the second consecutive year of rising total dollar volume, signaling a sustained recovery may be taking hold. Median prices hit post-COVID highs across every sector except hospitality, and for the first time since 2022.
For more insights into national, regional, and sector-based transaction activity, view our interactive charts of the quarterly and annual results, or download the full report.
Podcast | 560 billion reasons the US CRE market is finding its footing
The CRE market didn't roar back in 2025. It did something more important: it stabilized. Omar Eltorai and Cole Perry, are joined by valuation and performance experts Phil Tily, Alexander Jaffe, MAI, and Michael Amthor to walk through the full-year 2025 picture using both Altus’ US CRE transaction data and the Altus analysis of the ODCE Index.
Key takeaways:
Industrial: Institutional capital appears to be concentrating on large-format logistics; smaller deal activity has notably slowed
Retail: Investors are increasingly drawn to mark-to-market lease opportunities, a thesis with similarities to what drove industrial interest five years ago
Office: Asset-specific events are now the primary driver of value movement, with broad market-wide repricing appearing to have largely run its course
Apartments: Sunbelt softening, gateway resurgence, and rising expenses are influencing the return profile across the sector
Important dates
Upcoming data releases and events
Data releases (Times in EST)
Monday, March 2
9:45AM: S&P final U.S. manufacturing PMI (Feb.)
10:00AM: ISM manufacturing (Feb.)
Wednesday, March 4
8:15AM: ADP employment (Feb.)
9:45AM: S&P final U.S. services PMI (Feb.)
10:00AM: ISM services (Feb.)
2:00PM: Fed Beige Book
Thursday, March 5
8:30AM: U.S. productivity (Q4)
8:30AM: Import price index (Feb.)
Friday, March 6
8:30AM: U.S. employment report (Feb.)
Upcoming industry events
March 3 – March 4: NAIOP I.CON West 2026 (Los Angeles, CA)
March 9 – March 11: Retcon 2026 (Las Vegas, NV)
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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