Cushman & Wakefield’s recently released “Market Matters” report focused on demographic shifts, CRE capital markets and Middle East tensions.
Energy Volatility
Crude prices have been volatile, though they have stabilized at around $100 per barrel.
Cushman & Wakefield’s baseline is that “the Hormuz disruption proves temporary, with oil averaging around $90 per barrel in the first half of 2026, before trending back toward $70 as flows normalize,” the report said.
However, the issue could change if the Hormuz closure is long-term.
Stable Capital Markets
There hasn’t been much pullback in recent deal velocity. The analysts also reported that AAA conduit and agency spreads “moved out less than 5 basis points (bps) in the immediate aftermath of the conflict,” representing a “notably contained reaction.”
Cushman & Wakefield explained that geopolitical issues lead to short-term hesitation versus cycle disruptions, and “the underlying drivers of this recovery remain intact.”
Resilient Numbers
The analysts acknowledged an increase in equity volatility, driven by technology-related value reassessment and macroeconomic stress.
In the meantime, credit markets aren’t suggesting distress, as corporate bonds increased by 23 bps since early February. “Most of that increase occurred prior to the Iran conflict,” the report explained.
Slowing Migration and Job Growth
In citing Census Bureau data, the analysts explained that U.S. population growth in mid-2025 had slowed to 0.5% due to a decline in international migration.
“The structural implications of this shift are already showing up across labor markets and consumer spending and may ultimately translate to demand fundamentals that underpin commercial real estate,” the report noted.
Meanwhile, on the labor front, the economy lost 92,000 jobs in February, even as unemployment remains stable. “Breakeven” job growth is near zero, though the analysts said that “modest job losses do not necessarily imply deteriorating conditions.”
The Upshot
The above impacts the commercial real estate sector in the following ways:
- Slower household and labor formation could impact multifamily absorption and office-using employment growth.
- A decrease in consumer spending could pressure the distribution and logistics space tied to retail.
In summary, near-term recovery in transaction volume, debt market liquidity and equity formation is still intact. However, “the next cycle’s return profile will increasingly depend on asset-level execution, income durability and market selection rather than assumptions of broad demand acceleration,” the analysts said.
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