This year has brought a lot of changes and questions in terms of economic growth, but as we all know, the major disruptor has been the threat of tariffs and the potential increase of the cost of doing business. So far, the major side effect has been uncertainty, but not much in terms of real monetary consequences. As a company, I am not aware of any out-of-the-norm cost increases beyond the normal annual increases we typically see every year. Having said this, I am somewhat ready for the other shoe to drop in regards to the doubling of the steel and aluminum tariffs. Unless these are rolled back, we should start to see the effect in a few months.
When it comes to the real estate market, we’re riding out 2025, and all the volatility that’s come with it, in anticipation of growth in 2026 and 2027.
The ULI Real Estate Economic Forecast expects growth for both the GDP and jobs this year, but the rate is predicted to be significantly slower than last year. Beyond tariffs, immigration policy and the aging population are significant factors in the slowed growth. What does this mean for us in real estate and construction?
- Senior housing is a clear winner in rental growth and total return
- The overall office market remains challenged
- Retail is forecast to have solid three-year returns and rent growth