SVN’s early April Economic Update highlights a U.S. economy facing mixed signals, with steady growth but rising uncertainty. Persistent inflation and higher interest rates continue to weigh on capital markets and transaction activity, while recession concerns and cautious sentiment linger. Despite this, parts of the commercial real estate market remain resilient as the industry adapts to evolving conditions.

This update analyzes U.S. economic trends and commercial real estate performance, highlighting moderating inflation, slowing GDP growth, and steady consumer sentiment. Key sectors show mixed results, with industrial real estate leading, retail remaining resilient, and office markets diverging between suburban and urban demand. With interest rates stabilizing and investment trends shaped by AI growth and policy uncertainty, the report provides insights into housing affordability, rent trends, and improving but cautious investor sentiment in today’s evolving CRE market.

The latest economic update reveals a bifurcated landscape with steady 2.6% annual inflation. While industrial demand remains robust - indicated by the Logistics Managers Index reaching a one-year high - the labor market faces headwinds after shedding 92,000 jobs in February. Geopolitical risks in the Middle East threaten to push oil above $100 per barrel , while the commercial real estate sector increasingly relies on loan extensions to manage office assets that have seen values drop by an average of 56%.

The economy is moderating but steady, with slower GDP growth, 2.4% inflation, and a data-dependent Fed. Consumer sentiment is improving and AI investment is driving growth. In commercial real estate, industrial leads, apartments are stabilizing, retail is steady, and office performance remains split between suburban and CBD, amid ongoing housing affordability and policy debates.

Stronger job growth and improving logistics signal resilience, while flat retail sales and fewer job openings point to caution. In commercial real estate, office delinquencies hit a record high as industrial and lodging improve, with migration and foreclosure trends shaping the 2026 outlook.