America’s economy is in a precarious position. While inflation is easing and unemployment remains low, job creation has slowed, tariffs are increasing goods prices, and inflation hovers just above the Federal Reserve’s comfort level. This environment suggests that interest rates will stay high for longer, delaying capital rate compression and limiting transaction volumes in commercial real estate.

ICE plans to spend $38.3 billion acquiring warehouses to convert into detention facilities, significantly expanding its real estate footprint to support deportation efforts. The Department of Homeland Security has invested heavily in vacant industrial properties, facing challenges such as local opposition and rising renovation costs.

Meanwhile, NATO is adapting, influencing capital flows in commercial real estate. Secretary of State Marco Rubio’s efforts in Munich aimed to stabilize transatlantic relations as investment patterns shift. As Europe boosts spending on defense and infrastructure, global capital is recalibrating, with some institutional investors moving allocations from the U.S. to Europe. NATO’s strength may become an important demand driver in the CRE market on both sides of the Atlantic.

Source: Bisnow

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