If you’ve been paying attention to the news lately, it feels like the world is lurching from one surprise to the next — and yet, when I step back and look at the real estate markets, I’m more convinced than ever:

Commercial real estate remains one of the best places to be positioned right now.

The macro landscape shifted dramatically over the last month.

President Trump’s sweeping “Liberation Day” tariffs pushed the U.S. effective tariff rate to historic highs, sparking economic volatility not seen since 2020. Overnight, imports faced a blanket 10% tariff, with China-specific duties skyrocketing to over 100%. Treasury yields whipsawed. Equity markets panicked. Inflation projections were revised sharply upward.

In other words, uncertainty is back with a vengeance — and that’s exactly why CRE, especially multifamily and industrial, is once again emerging as a safe harbor.

The New Economic Reality: Volatility is the New Normal

Following the tariff announcement, the Economic Policy Uncertainty Index spiked to its second-highest level on record. 10-year Treasury yields jumped from 3.34% to 4.4% almost overnight — the sharpest three-day spike since 2001.

Meanwhile, CPI inflation, which was tracking at 2.4%, is now expected to climb into the mid-4% range, driven largely by tariff-related supply shocks.

And while traders initially priced in aggressive Fed rate cuts for 2025, Fed Chair Powell has made it clear: the Fed isn’t going to blindly react to market tantrums. He emphasized the need to prioritize “hard data” over volatile sentiment, hinting that rate cuts could be fewer — and slower — than the markets are hoping for.

Where Does That Leave Real Estate Investors?

Interestingly, even as broader markets wobble, commercial real estate fundamentals remain sound.

• Multifamily absorption stayed strong through late 2024 and into Q1 2025, with over 400,000 units absorbed in the second half of last year alone. While we expect some cooling due to weaker consumer sentiment, demand for apartments is supported by a wave of delayed homeownership from Millennials and persistent single-family housing affordability challenges.

• Industrial markets are starting to realign. Higher tariffs on Asian imports could accelerate nearshoring trends, boosting demand for inland and border logistics hubs across the U.S. Think El Paso, Laredo, and secondary distribution markets.

• Retail vacancies remain at historic lows (~4.5%) nationally. While discretionary spending is softening, budget-friendly and grocery-anchored retail is holding strong, helped by a very limited development pipeline.

• Office is still challenged structurally, but selective suburban and Class A urban assets are stabilizing faster than many expected, especially as labor markets remain resilient and corporate return-to-office efforts regain steam.

In short: the underlying real estate demand drivers haven’t evaporated — they’re just evolving.

HUD Policy Changes Could Unlock a New Development Cycle

One of the most important (and underappreciated) developments in the current environment is the return of HUD as a major financing partner.

The new administration’s focus on expanding HUD-insured multifamily loan programs — particularly the 221(d)(4) construction program — is a huge win for developers. Notably, HUD is streamlining regulations, offering more flexible underwriting, and prioritizing deals in both primary and secondary markets.

This comes at the perfect time: multifamily starts have dropped over 40% since peaking in late 2022, while household formation remains strong. We’re heading for a significant undersupply in many metros within the next 3-5 years, especially in Sunbelt and high-migration markets like Austin, Raleigh-Durham, Jacksonville, and Northwest Arkansas.

Strategic Markets Are Emerging

Berkadia’s research highlights several markets that continue to outperform on net migration and net absorption — even amid economic uncertainty.

Top names include:

• Austin: Strong job growth, net migration leader, robust demand pipeline.

• Boise: Net absorption consistently outpacing new deliveries.

• Charleston, SC / Huntsville / Northwest Arkansas: Mid-sized cities benefiting from nearshoring and lifestyle migration.

These markets aren’t just resilient — they’re becoming magnets for institutional and private capital alike.

Why I’m Doubling Down Right Now

Look — uncertainty isn’t comfortable.

But for those of us willing to embrace it, this moment offers tremendous opportunity.

Here’s how I’m thinking about it:

• Target markets where fundamental demand drivers (jobs, migration, affordability) are intact.

• Partner smartly with capital sources that understand the long-term upside and aren’t spooked by short-term noise.

• Underwrite conservatively, stress-testing deals against higher cap rates and slower rent growth assumptions.

• Move with urgency when attractive opportunities surface — the financing windows may be narrow.

As inflation and rates stay choppy and global markets reprice risk, real estate is becoming the asset class investors trust to protect their capital and deliver durable cash flows.

It’s not going to be a straight line — it never is.

But if history is any guide, those who lean in now will be the ones who build real wealth over the next cycle.

And personally, I wouldn’t want to be anywhere else.