Recent economic shifts, including new tariffs and significant volatility across the U.S. economy, highlight the need for strategic adaptation in the commercial real estate market. Amidst these shifts, we are also observing positive trends that should be monitored and leveraged. Staying informed and proactive is crucial for maintaining a competitive edge and seizing opportunities.
Tariffs and the Commercial Real Estate Market
With the recent imposition of tariffs on U.S. imports, the commercial real estate market has felt the impact. The industrial sector, in particular, is expected to experience an array of changes—warehouse construction cost increases, heightened industrial leasing demands, rising investor interest—as we move forward under these new regulations. As with other industries, the tariffs have caused some disorientation. The key may be to keep a close watch on policy changes as we navigate through this uncertainty.
Increased CRE Lending in an Uncertain Market
Although the U.S. economy has experienced significant volatility lately, we are seeing a rise in commercial real estate lending. Currently, the CRE market index shows U.S. commercial loan closings have increased by 13% from the fourth quarter of 2024 and by 90% year-over-year.
Replacing Outdated Amenities
With office vacancies still a concern for some landlords, they are looking to make changes that help attract and retain quality tenants. One rising trend among them is doing away with perks that are no longer considered relevant. Some amenities that are less favorable among modern tenants include swimming pools and even boardrooms. They are being replaced with more lifestyle-centered features that tenants are actually interested in, like nap pods, lounges, and onsite gourmet food options.
Changes in the commercial real estate market are often rapid and unpredictable. Paying attention to new policies, trends, and market data is key to adding value to your portfolio and remaining resilient in this market. Taking a proactive approach to these shifts is imperative for continued growth.
