Avoid the CRE FOMO: The 5 Leading News Stories of the Week of May 26th-30th

Each week, LightBox carefully selects the most impactful economic news, market metrics, in-house data and analysis, and transactions shaping the CRE industry.

In This Week’s Edition:

1. April PCE Cools Slightly—But Is It the Calm Before a Tariff-Driven Inflation Surge?
2. LightBox’s Q2 Webinar Highlights CRE Market Recalibration with Focus on Asset Management
3. Are Tech Giants Reshaping the CRE Playbook? Clues from Q1 Earnings Calls
4. Two Multifamily Deals Highlight Divergent Opportunities in a Complex Market
5. 10 Federal Buildings Up for Grabs in Major Disposition Wave

Friday’s PCE report—the Fed’s preferred inflation gauge—delivered a reassuring signal: Inflation is still trending downward, at least for now. The news gave the market an opportunity to breathe a sigh of relief amid mounting economic uncertainty. Headline PCE rose just 0.1% in April, bringing the 12-month rate down to 2.1%, its lowest level since September 2021. Core PCE, which strips out food and energy, also ticked up just 0.1%, pulling the annual core rate down to 2.5%—the lowest since March 2021. Consumer spending increased 0.2%, while personal income rose 0.8%, suggesting economic momentum remains intact despite trade tensions. But the mild inflation readings may be short-lived: Economists at Bank of America and Goldman Sachs forecast that inflation will shoot up to more than 3.5% by year’s end as tariff impacts begin filtering into prices by late summer, particularly in consumer goods and construction inputs.

The LightBox Take: The mild PCE inflation report for April could be viewed as a win for Fed Chairman Powell’s “wait and see” stance on monetary policy. While this report gives the Fed short-term breathing room, don’t mistake calm for certainty. Core inflation is easing, but rising tariffs threaten to rekindle price pressures, complicating the timing and scale of any interest rate cuts. With trade policy very much in flux and supply chains across the board on edge, all eyes are on June and how long this soft landing can hold.

In LightBox’s webinar last week—CRE in the Crosswinds: Q1 Insights & Near-term Forecast—one thing was clear: The headlines proclaiming that CRE lending and investment are in retreat are overstated. Yes, there are growing concerns around tariffs, market volatility, and softening sentiment, but panelists agreed that while capital is being more selective, it’s not moving to the sidelines. The momentum of the first few months of 2025 is holding steady. As Victor Calanog, managing director and global co-head of Research and Strategy at Manulife Investment Management, pointed out, “There are still a lot of investors who want to do business right now, and our job is to allocate capital thoughtfully, not to wait for perfect clarity.” That sentiment was supported by LightBox’s latest metrics which showed commercial property listings up by an impressive 48% year-over-year in Q1, lender-driven appraisal volume increasing for the first time in three months, and environmental due diligence volumes that are positioning the market for the second year of consecutive growth since 2021. Despite March and April’s volatility as the tariff cycle revved up and soft data like business confidence starting to fray, hard data on CRE activity isn’t showing cracks—at least not yet. The LightBox Transactions Tracker demonstrates that big-name investors like Blackstone and RXR are still closing deals across geographies and asset classes, an important sign that CRE activity remains surprisingly steady. As panelist Cindy Cooke vice chair at Colliers put it, “There’s a lot of capital out there. It’s just being cautious—and rightfully so, but it’s still looking for a home.” Whether in multifamily, grocery-anchored retail, or select industrial plays, investment is still happening—just with more discipline. In contrast with the market peak of 2021 and early 2022, cap rate declines and price appreciation are no longer guaranteed.  “To pencil out, deals need to be based on pretty severe assumptions. In this era, we can’t just count on cap rate compression like we used to. It’s brought asset management back in vogue,” noted Calanog. “Now it’s even more important to make sure you’ve got your asset management buttoned up.”

The LightBox Take: In a market whipped by headlines on tariffs, deficits, and policy pivots, panelists offered a reassuring view that CRE investment and lending activity is holding steady, even as the market shifts to a more selective, risk-aware posture. The path ahead will favor stabilized assets like multifamily and grocery-anchored retail, while sectors tied to global trade or speculative development could fall out of favor. With uncertainty clouding interest rate expectations and macro stability still in question, this phase of the cycle will reward strategy and smart asset management over overly optimistic assumptions.

The latest round of tech giants’ earnings reports provides a telling look at where these leaders are focusing their CRE investment strategies. Nvidia’s record-breaking $44 billion revenue in Q1 didn’t just signal AI dominance—it put CRE at the center of its expansion strategy. While peers like Microsoft, Amazon, Alphabet, and Meta are shifting their strategic focus toward efficiency, modular growth, and selective expansions, Nvidia remains in full-throttle buildout mode, emphasizing a global push to construct “AI factories.” As noted in LightBox’s recent analysis of the latest earnings from tech giants, these next-gen data centers require careful site selection consideration given the unique demand for available power, land, and scalable infrastructure. Unlike past tech cycles that were driven by a quest for square footage, today’s site selection hinges on megawatts and grid reliability. From Northern Virginia’s grid failures to PG&E’s 40% spike in power requests, the new reality is clear: “Electricity is the new zoning,” as LightBox’s Dianne Crocker put it. Meanwhile, capital expenditure plans remain massive—$25B at Amazon, $17B at Alphabet, $15B at Microsoft—but the tone has shifted to smarter, phased, and more resilient deployments. CRE leaders must now align to meet the need for combining real estate, power, and permitting considerations into one strategic offering.

The LightBox Take: Nvidia’s Q1 signals a new phase of accelerated AI infrastructure development, and this next wave will be all about speed, grid access, and execution. CRE professionals who understand power constraints and can deliver modular, entitled, and energy-ready sites will be uniquely positioned to take advantage of opportunities in the tech sector.

In a bold move that bets big on multifamily in Atlanta, Equity Residential struck a $535M deal to acquire an eight-property, 2,064-unit portfolio. Atlanta’s population growth and rent resilience make it a prime market for repositioning quality product—especially for investors that have the platform to execute. This portfolio had an average Q1 vacancy of only 5.4%, an asking rent per unit of $1,830 and most properties built between 2007 and 2018. Meanwhile, Camber Property Group acquired a newly built, 183-unit multifamily building in Brooklyn for $72M. The building will be converted into affordable housing in partnership with the NYC Department of Social Services. The project is located within the East New York rezoning area, which was approved in 2016 to promote housing development in underserved neighborhoods.

The LightBox Take: These deals highlight the range of investments happening weekly in multifamily in metros across the U.S. Some are classic yield-driven bets on future ROI in markets that offer healthy rent and demand growth in markets not constrained by oversupply or overdevelopment. Others are attracting attention as part of affordable housing initiatives in cities like New York City. It’s worth noting, however, that rent stabilization measures, especially in New York City, add layers of complexity to deals particularly as operating costs like insurance are surging. Both paths underscore the importance of asset-level discipline in today’s high-rate, selectively risk-on CRE environment.

The Public Buildings Reform Board (PBRB), established by Congress to streamline federal real estate holdings, has recommended the disposition of 10 high-profile government-owned properties across eight states, totaling nearly seven million square feet. The move is projected to generate $346 million in sale proceeds and save taxpayers $5.4 billion over the next 30 years by offloading properties with significant deferred maintenance and low utilization. Key assets include the James V. Forrestal Building in Washington, D.C.—home to the Department of Energy—widely viewed as a prime redevelopment opportunity. Other notable sites include federal buildings in Chicago, Atlanta, Boston, Houston, and Miami, all located in high-demand urban cores with potential for adaptive reuse, mixed-use development, or private-sector repositioning. The PBRB’s criteria prioritized underperforming assets with strong market potential, aligning with broader federal goals to modernize infrastructure, reduce operational costs, and return valuable land to local tax rolls.

The LightBox Take: This wave of dispositions presents a rare opportunity for cities and developers to reimagine urban spaces once off-limits to private investment. Dispositions can unlock urban revitalization, but only if municipalities act swiftly to update zoning, streamline approvals, and attract private capital ready to reposition these legacy properties for modern use.

Important dates and industry events this week

• Monday, June 2
  • Construction spending
• Tuesday, June 3
  • Factory orders and job openings             
• Wednesday, June 4
  • ADP employment and Fed Beige Book
• Thursday, June 5
  • Initial jobless claims, U.S. trade deficit and productivity
• Friday, June 6
  • U.S. employment report, unemployment rate

For more insights on commercial real estate data and trends, subscribe to Insights and the CRE Weekly Digest Podcast  for commentary and real-time data.  

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