As Uncertainty Rises, Stability of CRE Stands Out
Uncertainty on the Rise: A Potential Long-Term Tailwind for CRE?
Elevated Uncertainty Is Affecting Investment Strategies
The U.S. Uncertainty Index has more than doubled since October, reaching levels parallel to the Global Financial Crisis
Increased executive actions, tariffs and policy shifts are contributing to an unpredictable environment for investors
Investors could stall decision-making as they wait for greater clarity, which could delay commercial real
High estate trading activity
Market Volatility Highlights CRE’s Stability For Investors
uncertainty often drives volatility in the stock market, making more stable investment alternatives like real estate more attractive
Over the last couple of years, commercial real estate asset pricing has adjusted to align with higher debt costs
Limited new construction in key commercial real estate sectors also support the outlook for long-term property value growth
Strong Fundamentals Support The U.S. CRE Outlook
GDP growth is healthy, job creation continues, and unemployment is low — signaling that the economy remains on solid footing
Apartment net absorption hit record levels in late 2024, office demand is rebounding, and new retail supply additions remain constrained
New policy changes regarding tariffs and immigration could limit new supply even further by increasing construction costs, supporting long-term commercial real estate asset performance
* Through January 2025
Sources: Marcus & Millichap Research Services, Scott R. Baker, Nicholas Bloom, and Steven J. Davis.
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