What Q2 Is Signaling for Q4
In this shifting commercial real estate landscape, some of us are navigating a market correction for the first time, while others are facing new challenges in familiar cycles. This month’s State of the Market call took a different approach—focused less on headlines, more on context, and grounded in the actions that matter now.
If you missed the session or want to revisit key points:
Market Overview: Reframing the Data
Rather than simply reviewing national trends, we encouraged attendees to evaluate conditions in their own markets—what they see on the ground, what the data reflects, and how these insights should shape client conversations.
By product type:
- Office remains soft in major urban cores, but suburban and formerly tertiary markets are showing signs of stabilization with steady rents and vacancy rates.
- Flex and small-bay industrial continue to outperform expectations, driven by localized demand.
- Large-scale industrial, which surged during the pandemic, is showing modest declines in absorption and pricing.
Consider:
Are these patterns holding true in your area? Where do they diverge? More importantly, how are these trends influencing business decisions among your clients?
Capital, Rates, and Market Friction
The lending environment remains cautious. Interest rates are holding firm, and recourse is now more frequently required. Some suggest we may be witnessing a deliberate strategy—applying economic pressure via inflation and tariffs to force the Fed’s hand on rates.
Key takeaway:
It’s a “molasses” market—slow, sticky, and uncertain. But it’s also a moment of quiet movement. For well-prepared investors, this may resemble the early signals seen in 2008: difficult on the surface, but rich with potential for those positioned correctly
Multifamily Insight - Portland Case Study with Ben Ficker
We welcomed Ben Ficker, a Portland-based multifamily advisor, to discuss the unique challenges and opportunities facing that sector:
- Ongoing rent control legislation, screening restrictions, and no-deposit mandates have complicated ownership and slowed transaction volume.
- 2022 was the worst transaction year on record for Portland. 2023 showed slight recovery, and 2024 is starting with cautious optimism.
- Construction starts are at a 10-year low, and escalating tariffs are expected to make new development even more difficult.
Ben emphasized a recurring issue: cities are raising funds for housing but failing to execute effectively. Some units are costing $700,000 per door—well above what most would consider affordable.
Recommendation: Encourage clients to revisit valuations. Ask:
“When was the last time you had a current opinion of value?” This question opens the door to meaningful advisory conversations and helps position you as a long-term strategic partner.
Retail, Franchising, and Commission Risk
Consumer activity is shifting in subtle but important ways:
- Retail foot traffic is increasing, but discretionary spending is declining. Urban retail is under more pressure than suburban corridors.
- In the
franchise sector, investor interest is rising—but so are risks for agents. Deals are closing, but commissions are increasingly being negotiated into installments or delayed entirely due to landlord instability.
Agents must be prepared to navigate these conversations—especially with newer professionals who may not yet have encountered this type of market friction.
Strategic Priorities for Q2 (and Beyond)
We are now a full week into Q2. That doesn’t just set the tone for the quarter—it’s actively shaping how Q4 will unfold. The work you do now will determine how you close the year.
What you should prioritize today:
- Conduct updated
property valuations across your book of business
- Re-engage your
client database and recommit to outbound conversations
- Ensure
marketing systems are running in the background—especially passive lead generation
Guide clients through
timing strategies ahead of potential tax policy changes
Closing Perspective
Tariffs, interest rates, construction costs—these are not isolated data points. They are part of a broader economic framework that affects every product type, market, and client decision. Your ability to interpret and communicate these shifts will set you apart.
Access the full recording here
Whether you missed the session or want to revisit it with your team, this discussion is essential viewing.
Next month, we’ll be joined by Chris Puzello from Launch Capital Markets for an in-depth look at current lending conditions and what to expect moving into Q3.
Until then—stay informed, stay proactive, and stay connected to what matters.
