Will Office Recovery Influence the Broader CRE Market?

CRE Outlook Shaped by ​Evolving Inflation Pressures and Office Return ​​​

Inflation Bump Remains Modest… for Now​

• Headline inflation rose to 2.7%; core inflation ticked up to 2.9% in June​

• Tariff impacts are emerging in goods like appliances and electronics​

• Broader inflation effects are likely delayed while businesses sell their pre-tariff inventories​

Office Attendance Trending Up, But Slowly​

• June office attendance rose to 72.6%, up from 29% in June 2021 (compared to June 2019 levels)​

• Office vacancy rates have trended lower since reaching their peak in the first half of last year​

• More companies are mandating in-office work​

Return to Office Supports Broader CRE Demand​

• Office use influences housing and retail space demand​

• Local return-to-office momentum varies, but forward-looking investors may find value in the emerging trends​

Office attendance share of June 2019 total​
Sources: Marcus & Millichap Research Services, Placer.AI​

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