Forecasting Through Fog — Rebecca Rockey on Stagflation, Tariffs & the CRE Outlook

Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting at Cushman & Wakefield, joins the LightBox team for a focused conversation on the macroeconomic forces shaping commercial real estate in the back half of 2025. With stagflation creeping in, tariffs hitting record highs, and policy uncertainty clouding forecasts, Rebecca breaks down what’s different about this cycle and why the road ahead could be bumpier than many expect. From the surprising resilience in CRE capital markets to growing inflationary pressures in the goods economy, she explains why retail and industrial are especially vulnerable, and how the multifamily and office sectors are navigating this transition. Rebecca shares why construction costs are poised to rise 4.5% due to tariffs, how that could pause new development, and what that means for vacancy and rent trends heading into 2026. She also weighs in on where the Fed might land on rate cuts, what’s really driving office recovery (hint: it’s not just RTO), and why 2027 could shape up to be a banner year for CRE. Packed with data, context, and a dose of Rolling Stones wisdom, this episode is a must-listen for anyone looking to make sense of an uneven economic outlook. 

01:04 Stagflation Watch: Are We Already There? 

03:35 Policy Shocks & Forecasting in Uncharted Waters 

04:42 Resilience in Capital Markets 

13:00 Sector Snapshot: Retail, Industrial, Office & Multifamily 

21:18 Construction Cost Crunch & Development Slowdown 

31:17 The “One Big Beautiful Bill” & What It Means for CRE 

34:00 Crystal Ball Closeout: Labor Signals, CRE Resilience & What’s Next 

Have questions for the pod team? Send them to Podcast@LightBoxRE.com. 

www.lightboxre.com

Transcript

The CRE Weekly Digest by LightBox

Episode 56: Forecasting Through Fog – Rebecca Rockey on Stagflation, Tariffs & the CRE Outlook

July 25, 2025

Martha Coacher: This is the CRE Weekly Digest by LightBox, a firm transforming the commercial real estate landscape by connecting every step of the CRE process with comprehensive tools and data. I'm Martha Coacher with our experts, Manus Clancy and Dianne Crocker. Today we're joined by one of the leading voices in commercial real estate forecasting.

Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting at Cushman and Wakefield. For more than a decade, Rebecca has been at the forefront of macroeconomic forecasting and CRE analytics, leading predictive modeling across metros and property types, advising global clients and helping shape how we interpret market cycles.

In this episode, we're gonna dig into Cushman's CRE outlook from stagflation signals and the fed to tariffs, distress, and how capital markets may find their footing in the second half of 2025. Welcome, Rebecca. 

Rebecca Rockey: Thank you so much for having me. 

Martha Coacher: Well, I hope you brought your crystal ball with you 'cause we're gonna try to get some predictions out of you at some point later today. But let's start with Cushman's mid-year outlook report. One of the key takeaways from that report is that we're in a period of short term stagflation, a tricky mix of slowing growth and persistent inflation. From where you sit, is the economy still threading that needle? 

Rebecca Rockey: I think it would be safer to say that the economy has been on solid footing for the most part, and is heading into a period of stagflation, and we're really in the early stages of that transition into that period. We saw some abnormal behavior in the first half of the year, particularly around the tariff announcements, front loading inventory, building consumers rushing out to buy autos, in particular in anticipation of tariffs. So the first half of the year, there was some noise in the data.

Generally speaking, the economy has held up pretty well. But moving forward, as we see the effects of shifting policy become more entrenched, we're likely to see some slowing growth in the macro economy, and we're likely to see some inflationary pressures start to build specifically in the goods economy.

Dianne Crocker: A lot has changed since I last saw you at the MBA of New York conference, which I think was a few years ago. We've made it through six noisy, sometimes surprising months. I feel like any forecast that we made in January were pretty much obsolete by March or April. So I'm wondering, because you've been through several commercial real estate cycles at this point in your career, what kind of feels different to you about this one versus previous cycles?

Rebecca Rockey: A lot has changed and I take to heart that how difficult it has been to forecast. In fact, in December when we typically put out an outlook, we just put out a note saying, hey, things are very, very uncertain right now, and instead of forecasting, we're gonna wait for some more information. And that was really what we put out in this mid-year outlook.

I think there are a few things that are different. Obviously there are some structural trends that are picking up, so AI's a great example that's different than it was two years ago. But on the macroeconomic side, especially around policy, we have unprecedented trade policy unfolding right now. We have not in the post World War II era gone into a period of time where not only do we have very high tariff rates now, even with some of the pauses that we've seen take place. But we haven't gone through a period where we went from very low to very high, which is the transition that we're currently making. So when you're making predictions, you are doing based on your best understanding, but there aren't a lot of analogs in post World War II history for us to draw on about that experience.

So that uncertainty and the fact that it's not really coming from markets, market based uncertainty is something we can understand and price more effectively, makes it more difficult, and it does make some of the forecasting process more subjective around what do you think the end state of policy is going to be? That always matters, but I would say it's a more important factor now than it has traditionally been. 

Manus Clancy: One question that really flummoxed us here on the podcast in recent months was in April, early May when the equity markets were really tanking, when volatility really took off, unlike in past similar periods, the CRE market really soldiered on. There was no pullback in lending. There was no pullback in deal velocity. It took us by surprise. Did it surprise you? 

Rebecca Rockey: Yeah, a bit. I would say what didn't surprise me is that many anticipated that the moves being made, especially around Liberation Day and so on, that they were understood to be part of a broader negotiation process and so taking them at face value even then, despite how surprising those moments were, that there was some understanding that's not the end state. This is really going to be the starting point for a negotiation. And I think that helped to insulate the response outside of equity markets. Even equity markets very quickly started to come back and within one week, you know, we started to see the initial pause take place, the 90 day pause with most of the world. And so that assumption, I think was a good one by markets. 

Dianne Crocker: So Rebecca, I know the question on everybody's mind is, what is the second half of 2025 look like? I think it's fair to say that tariffs and interest rate uncertainty are probably the two biggest wildcards in everybody's mind, and I do wanna get to that. But let's just start from a higher level and characterize for our listeners, what's kind of your general tone in terms of the outlook? Are you cautious? Are you optimistic? Pragmatic? 

Rebecca Rockey: It's a combination of those. I'm gonna be an economist and answer, but not answer all at the same time. No, I'm just kidding. We're cautious. Right? If you're introducing this kind of shift in the cost structure for a significant part of the consumption economy and the, you know, the inputs that firms used in the process of production. That's gonna have effects and it's just taking some time to work through and that was expected all along. So generally speaking, both that impact and the toll of uncertainty around where this all ends up in the end, will start to affect growth. We've, you know, seen some slowing already, which has been happening last year, it certainly has been happening in the first six months of this year. But that's still going to continue to happen. And so what that means is not all boats in the economy are lifting with a rising tide. We're still growing, but we're under potential. That means some markets are not growing as fast as others. Some might not be growing at all. It means that some sectors are gonna be growing more slowly, or maybe not even at all for a period of time. That's already been happening under the surface for the last 18 months. I think we're gonna see more of that, but it will coincide with some additional inflationary pressures, building on the good side of the economy where we're seeing tariffs start to emerge.

We just got our first reading of the inflation report where we started to see those early signs that it's coming through. Now it didn't fully come through, it will take more time. But that's gonna be an uncomfortable period. Anytime you're growing below potential or you're getting to that potential growth rate in the economy, think maybe 1.7, 1.8% economic growth, then things just become a little bit more challenging. And it's definitely gonna feel different than the really robust pace of growth that we've had the last few years.

I think what this also does for our industry with the focus on rates being so top of mind is that it also clouds that outlook. And you know, we have specific views around the rate outlook, I know we'll get to that. The last thing I'll say is that different sectors have different levels of exposure to this particular policy move that the administration has made, and to the uncertainty that's out there.

A perfect example is the office sector, which, you know, if you don't follow office labor markets, had been contracting for the last two years. So a lot of the softness we saw was not just about return to office, it was also what's actually going on in the labor market. And we've seen stabilization there and we're expecting some actual growth there, which should help to keep momentum building in the office sector that we see negative absorption go less negative and ultimately turn positive at a time when the goods economy and industrial and retailers are navigating this period where consumers are more cautious, good spending is more challenged, and we see softness emerge there, at least in the immediate term.

As we head into next year, we think sequentially things will get better and better, and 2027 is setting up to be a very, very robust year for our sector. But generally speaking, as we head through the next half of the year, you know, expect just a little bit more uneven, more choppy economic outcomes, and definitely looking for some building on that inflation front.

Manus Clancy: I tend to agree with you, Rebecca. I do think that this is quite back loaded, that we haven't seen the impact of these tariffs yet, and honestly, the sums that are being collected are significant. We're talking a hundred billion dollars in the first half of the year, which I think is a 6x over what was collected last year. But my question is this. Do you think that the markets are complacent right now? We saw no pause in transaction velocity. We've seen higher for longer on the treasury side, especially on the 10 year treasury rate. We do have this tariff thing hanging over us, yet everybody continues to just march along. Are we complacent right now? 

Rebecca Rockey: You know, it's a good question. I don't know, maybe. I think there is much like the reaction after liberation day and understanding that this administration has been responsive in the past to economic outcomes, market outcomes, and there may be a bit of that built in. I also think that the resilient economic data that has persisted in the first half of the year in the uncertainty of where trade policy is headed in the end is helping to maintain some of that sentiment. And we've certainly seen that in CRE as well. There are lots of other policy tailwinds that will be backloaded, much like the effects of tariffs. So you think about deregulation, well, the effects of that will take place over time and grow over time, and that's really gonna unfold more meaningfully next year. The tax bill making its way through with some marginal shifts within it, that's gonna really start to unfold as we go through next year. And so the markets are trying to parse all of this and I give them some forgiveness in that it's very difficult. And at the end of the day, I don't know a single economist who is expecting tariffs to remain where they are now. In fact, most are assuming that over the next six to 12 months as deals are done, that that tariff rate comes down pretty rapidly and that this period of uncertainty and slowness is finite. And that could be something that markets are looking through appropriately. It may end up that they're not looking at it appropriately enough, and that ultimately there is some reaction as economic data shift over the coming months.

Manus Clancy: Some buyer's remorse perhaps if some of the stagflation comes through. So if we do see stagflation, if we do see prices start to go up and we start to see GDP come down, where does that leave Fed Chair Powell and the Fed? Where are we headed in the second half, according to your forecasts? 

Rebecca Rockey: Well, when we published the mid-year outlook, we were in the two rate cut camp for this year, both a September and a December rate cut, thinking with the backdrop of the labor market is already softening, right? We're seeing job growth narrow. We're seeing hours fall. Really the only thing holding it together has been this very low layoff rate, and as tariffs pinch more, do businesses resort to some more layoffs? It's a question mark, but the Fed doesn't wanna get there. They know that that tipping point is a quick one. And so we think that at some point the inflation impact of tariffs, we can anticipate with some degree of confidence, not a high degree, but some degree of confidence, and that ultimately that leads them to cut in anticipation of some of this softness coming through and thinking that this inflation impact will be confined to really just the next 12 months or so. It's a sort of, in other words, impact to the level of prices, but not to the inflation rate itself in an on and enduring basis.

I would add one comment, which is with the latest readings of inflation, you're seeing those early signs of some inflation impact from tariffs, however, if you look at the job growth data, it has been softening, but payroll tax withholdings for July have looked quite strong. It's likely that we're gonna get a pretty decent report for the month, and so I could certainly see question marks around that September. It could be a 50/50 call. The last time I checked markets were still pricing in two and many other forecasters. But I think everything about the outlook is uncertain and the Fed funds rate outlook is certainly one of the most uncertain things in the outlook. 

Dianne Crocker: This is not unlike where we were in 2024. Here we were in July, thinking that we would have an interest rate cut by now and we didn't. We did get a 50 basis cut, obviously, in September, and the market saw an uptick from that. So it sounds like we might get that, but we might not.

I did wanna lean into a comment that you made about tariffs, which is the market will eventually get some certainty there. Tariffs overall will come down and become more of kind of a finite thing that decision makers can factor into their investment decisions. But I wonder just generally, which sectors do you see as kind of most exposed or most vulnerable to impacts of tariffs? 

Rebecca Rockey: Well, I think from the commercial real estate perspective, there's no doubt that retail and industrial are the most directly exposed to tariffs. We've definitely seen more softness creeping into retail demand data. The last five months you would see that real retail sales, which are inflation adjusted, not the one that gets the headlines every single month in the media, that those have been moving pretty much sideways. And that just indicates consumers, you know, while they're out there still spending, they're also not spending more than they were before. And so that just points to a little bit of caution that's out there. That's creeped into commercial property markets, now you know, retail is also being very underdeveloped, and so the market is starting this process at a very tight point, and you could argue that retail is the sector that maybe is the least overpriced. The values are very far below replacement costs, so there's a lot of reason to be excited about retail medium term, but in the immediate next three, six months, there's definitely some challenge as they adjust, not just in the property markets, but just strategically to: How am I gonna source? What is my cost profile? How am I gonna absorb this additional cost to get these goods out of customs? And what can I pass on? What will my consumers tolerate? And so on and so forth. And the same thing will happen on the supply side of the economy with producers and manufacturers and the like as they try to navigate this period. What their reporting is very clearly a period of challenge, of uncertainty that the tariffs are having an impact. This comes through in the ISM index. This comes through in each regional Federal Reserve Bank, which tracks the manufacturing sectors in their district. It comes through in the Beige Book from the Fed. And so it's very clear while it may not be in all the macroeconomic hard data, the signals are coming in. And generally speaking, you know, we weren't expecting the most amazing year for industrial demand on a volume basis. This year we were expecting to be something like 180 million square feet or so when we came into the year. A normal year is about a 100 million square feet, more than that. So we were already expecting softness. You add to this now the uncertainty and the impacts of tariffs, and we've revised that projection doubt. Still positive, no recession in the outlook, but a step back from where it was.

Again, like I mentioned before, on the office sector side, we're actually kind of getting excited, so to speak. We're seeing some momentum shifts, much like the capital markets. Multi-family continues to produce outstanding demand numbers and absent a major correction in labor markets. As long as people remain employed, we should continue to see fairly favorable demand creation in that sector. So it will be isolated, some markets more exposed than others, but that adjustment period, we think in the second half of the year, first part of next year will take place. And then as we move through 2026, we'll continue to see stronger growth even in retail, even in industrial, again, speaking on a sort of leasing volume basis.

Manus Clancy: So let me scratch beneath the surface a little bit on the property types. I may run through questions a little randomly, but let's start with the retail. Obviously very tough decades, starting in 2015 through COVID, lots of bankruptcies, apparel hit very hard, electronics hit very hard. What is the worst case scenario if tariffs become higher for longer? Store closings? Lots of store closings? Bankruptcies? Do you have any sense of, are we back to 2020 again or are companies lean enough now after this bad 10 years, that they can navigate this better than in the past? 

Rebecca Rockey: I think they're in a much better position to weather different curve balls that the economy can throw at them, including the tariffs that we're seeing now. In terms of the worst case scenario, I mean, you could really construct dark scenarios if you want, whether they're likely is a separate question. So I think the worst case scenario for retail is the culmination of unexpected events plus maybe a sharper toll on economic growth than what we're currently expecting, whether it's from tariffs or some other changes that happen on the policy front, or uncertainty front. Other geopolitical events that could shock things is a recession. That's the worst case event for retail. That's obviously the worst case for any property type. I don't think that that's the most likely, I think based on at least the baseline we've laid out, which we think is pretty reasonable, that things will hang on and it will just be a tougher year. We'll see some store closures and they're looking to slightly outpace openings this year, but, you know, nothing like 2020 and certainly nothing like the decade before, which was very challenging. The retailers who have made it this far are in a much better position. They have right sized, they have integrated in this sort of omnichannel approach to their real estate, and so they're moving forward. We have many companies that are saying, no, we're ready to expand, or we're gonna open these stores this year. And there are some that are more exposed if you are catering to low income households, which are feeling the pinch more than anyone else, I certainly think that the outlook there is much cloudier than if you are catering to higher income households who drive 60% of spending and who really haven't taken a step back from the gas pedal on that front. 

Manus Clancy: Pivoting to multifamily, we've had two sets of headwinds over the last four or five years. Headwind number one is syndicators, taking on floating rate debt, value added projects, lots of distress. Followed by in 2023 and 2024, lots and lots of inventory coming online. Does the tariff slow that down? Does the tariff now provide a little bit of tailwind to stabilized properties, owners of stabilized multifamily at this point? 

Rebecca Rockey: On the margin yeah, I think so. I think any existing owner of any asset type, including multifamily, will benefit from now construction costs being higher, and ultimately that eroding some volume growth that would occur in the new construction space over the next 12 months, 18 months, and that that will ultimately, whether it's now or in the near future, like 2026 or 2027, put some marginal, extra downward pressure on vacancy rates, which will help fuel some earlier rent growth acceleration compared to what we would've thought before all of this. So I do think it will provide some sort of indirect headwind to new construction kicking off.

We've actually estimated that the impact on materials costs alone of the tariffs that are in place now, not anything that's threatened or something like that, is somewhere around 8 to 9%. And for the total project cost, that translates in to about a 4.5% impact to your total project cost. So now you have to be in an environment where you can push rents enough to justify that kicking off with that much higher of a cost profile.

And as we can see right now in the multifamily market, there's been a little step back in rent growth, more focus on occupancy. Now, that should shift over the course of the next 6 to 12 months, but that still creates another 6 to 12 months where we're not gonna see as much kick off as we otherwise would've.

Dianne Crocker: That's interesting. Rebecca, I wanna lean into something I think I heard you say earlier, which is I thought I sensed some bullishness in the office sector, and that's not something that we've heard a lot. I just spoke at the Environmental Bankers Association Conference and in office there were two factors that I think are driving some hope there. And one is just the fact that office properties, some are approaching obsolescence and there's a need for reinvention. And the second is back to office trends. You know, we saw a quote that more than half of Fortune 100 companies have fully in-office policies now according to Jones Lang LaSalle. So I kind of have a two-parter for you on office. One is, how do you see office distress playing out? And the second is, how are occupiers thinking creatively about recovering and rebuilding value in office? 

Rebecca Rockey: My perception has been many expect a cliff event like the GFC, but we're not in a financial crisis, you know, at all. So what we expect to see is a slow build of additional distress, both on a volume basis as well as a percentage of total transactions that are taking place. We're still very low levels. So just as a benchmark, we're hanging out somewhere around 3 to 4% of transactions are some form of distress. Now, that's up from the 1% range. At the peak of the GFC for distressed sales as a share of total trades, we got to around 10%, but that was not until around 2013.

So what I expect to see is a continued building of distressed transactions. Both in office, multi, we're seeing it slowly percolate into some other sectors, but those are the main ones, and that we're not gonna be at the peak this year, and we're probably not gonna be at the peak next year. But this is also something that can happen while you see a broader capital markets recovery.

So if you use the GFC as a little bit of an experience, you would see that it was really 2010 when the markets started to come back and you saw volumes starting to go up. You saw general measures of pricing, aggregate measures of pricing continue to grow after that point, even while distress transactions were rising at the same time. I think we're very likely to go through a similar experience, and that's very much what I'm sensing in the market. That very much is reflected in sentiment and what we're seeing happen across our capital markets business.

Now for office before I get into the occupier side, I think it's just, it's a complicated market, so I find it the most interesting. I sometimes joke it's like a soap opera because you really have to follow it regularly to know the storylines, which are complicated. We know top tier has done very well. Clients are flocking to higher and higher quality space. Maybe they downsize. It's still a higher rent. Maybe their cost goes up. Maybe their cost stays the same. It depends lease by lease. But there is some untold story, right? That's going on there. So when we look across the market suite track, which are around 95, and it's around five and a half billion square feet, around 55,000 buildings, what we find is within the Class A space, for example, 30% of assets are fully leased. Literally fully leased right now, and their vacancy rate peaked at a roughly 2% in 2021, and they've been improving that occupancy rate for literally the last four years, and it's zero now. Well, top tier is generally the top 15% of the market when you hear people talk about it. So what we know is there's strength well beyond the top tier.

We then have another 10% of buildings that are 2% vacant. They're not zero, but they're 2%, and another 10% of buildings that are 8, 9% vacant. So there's a tremendous amount of strength and resilience that is not reflected in a headline vacancy rate. What does get reflected in that headline vacancy rate is a growing tremendous concentration of weakness.

What we know is 10% of buildings are 84% vacant, and they add over 800 basis points to that headline vacancy rate. So that obsolescence is becoming very concentrated. It's becoming quite obvious which assets are the obsolete ones. What we know is some are challenged right now, but with the right investment can become viable.

Now, does that happen at a rent that the current owner likes? That's a question mark. I think that's gonna be a process that the capital markets continue to help us figure out, but the reality is it's an exciting market. There will be lots of opportunities. We're seeing a lot of strength. You have to go beyond the traditional measures that we've used and to your point about return to office that is growing, certainly in momentum it feels more announcements are out and so on, but at the same time, I think we should put more weight possibly on what's going on in the labor markets. Which is for two years, the labor markets in the office sector had been losing jobs, and one of the main categories was tech, which was shedding jobs for two straight years, and that's the number one or two leasing demand driver in most markets. So that was very important and that's starting to shift. So I think as much as we focus on return to office, I'm also focused on the fact that we're seeing this transition happen in labor markets. These are sectors that are much less exposed and in fact can perform with different cyclicality than the goods economy, which is, as we've talked about, facing its own challenges.

What I observe occupiers doing is really thinking about office space differently. For a long time after the pandemic, we got a lot of questions of what are our competitors doing? Everyone, it was like a little gossip situation, right? Like everybody wanted to know what everyone else was doing and decisions weren't getting made. In the last year it really feels like that has changed. Occupiers are less concerned about what others are doing. They're trying to figure out how do I use my office space to attract, retain the best talent. How does this become a place that is relevant for the work you need to do that is collaborative, that is gonna be about fostering ideas and meeting with clients and meeting with your teams, and less about focus work. I think we're just getting smarter about what we do in an office and the reality of agile or hybrid work was already penetrating the way that we work as a society before the pandemic. Now it's just a bit a higher share of the way that we work. And it happened faster than what we thought, and I think we're kind of nearing the final chapters of that adjustment. And it really seems like occupiers are moving in that direction, thinking about it differently, and you see that a bit in additionally some of that flight to quality. Companies that didn't necessarily think about that as a tool for talent are now thinking about real estate differently as a tool for talent, not just where do I put a bunch of workers in cubicles. I think those days are either behind us or they're numbered. 

Dianne Crocker: So Rebecca, I do, while we have your attention, wanna get your thoughts on the federal budget bill passing and just tops of the trees. What are you thinking in terms of any direct or indirect implications for commercial real estate? 

Rebecca Rockey: Yeah, the OBBB, the one big beautiful bill, which is I believe the formal title of the bill, is definitely big. I think for the question of beautiful is really a matter of well over what time and who are you? For commercial real estate I think it's very easy to argue this is a net positive in the immediate term. That's the next two, three years. A lot of the spending cuts, which were included are backloaded, so they're gonna start to happen after the midterms and into 2027, really and beyond. And we're seeing, you know, extensions of important tax provisions get passed now. So there's more certainty, that alone has some benefits. And on the margin there were changes in provisions that I think are net positives for commercial real estate.

The countervailing point to that, which are very specific to the bill is there are indirect effects of things like passing a bill, which is estimated to add to deficit spending over the 10 year window. They use this 10 year window specifically because they passed this through reconciliation, which requires just a simple majority to get the bill done, and they look at over that 10 years, what's gonna happen to revenues, what's gonna happen to spending, and on net there's expected increase in the deficit.

Now estimates range, CBOs final estimate was something like $3.4 trillion. I think it just came out yesterday in fact. And that on the margin may put some upward pressure on treasuries. It's hard to pinpoint this exact bill causing that change in the 10 year treasury. The benefit is really the fact that there's now certainty and that these got through, there's no kind of final 24 hour countdown at the end of this year that creates some volatility and pause. And certainly seeing a tax hike, the likes of which would've happened had this not been passed, would've been very detrimental to the economy next year. So I think for that reason, it's generally a positive and our sector will benefit from that. 

Dianne Crocker: Well, I think our listeners are gonna come away from this feeling a little bit better about where things stand. Let's end with a lightning round Rebecca. If you had to look into your crystal ball six months down the road, you know, is there a word, a phrase, a theme song that you would use to characterize the market and why? 

Rebecca Rockey: I think I would maybe use, You Can't Always Get What You Want by The Rolling Stones. It just, the bill, even talking about the bill just now. You have a positive on one side and then maybe a headwind on the other. I think we're gonna be in a choppier environment, and so there are gonna be positives, but there's also gonna be offsetting factors, and so you're never gonna get everything that you wanna see. That being said, we still think it'll be a growth period, but one that's just a little bit more challenging for the macro economy than it has been recently.

Dianne Crocker: What's the one market signal that you're watching really closely about where the market's headed that maybe others might be overlooking? 

Rebecca Rockey: I'm gonna cheat a little bit in my answer because I do think others are looking at this, but when it comes to commercial real estate as much as rates dominate conversations and tariffs and policy and all of the things that are happening in the world. Ultimately, I know from being a forecaster and modeling that the labor market is king, and so I'm watching what's happening to the diffusion of job growth. I'm watching what's happening to hours. I'm watching what businesses are saying about their intentions around labor in surveys, whether that's small businesses or broader measures, manufacturers or retailers and so on. Because ultimately consumers drive our economy and they don't spend, if they don't have a job. So it can be like a light switch. It's hard to anticipate when they start to pull back or when they start to lose that confidence. But ultimately, watching the labor market is gonna be your best ability or give you the best ability to anticipate where they're going. And so anything related to the labor market is gonna be something I watch very closely. 

Martha Coacher: And Rebecca, do you have a quick preview of any upcoming research we should look out for in the short term? 

Rebecca Rockey: Sure. So we talked a bit about the bill, the OBBB. We just put something out on that. We do have some research around the tariff impacts on construction costs coming out. We didn't quite get into it, but there are also some new trends emerging in the office sector, some structural shifts within buildings. So we're gonna be putting out some research around what we're seeing happen in terms of behavior for top floors versus middle floors and bottom floors within high rise markets, structural changes happening there. And so those are gonna be things to look out for as well as a follow up to reimagining cities, which we published last year. We took a look at, you know, what could be the value creation if cities really take seriously the need to balance their real estate portfolios. What could be the value that you unlock? And the little preview I would give you there is it's well over a hundred billion dollars just in 15 cities. So we're pretty excited about the opportunities that exist for the market in the future, and they're just gonna happen and show up in a lot of different ways. 

Martha Coacher: Well, we'll keep an eye out for that. Thank you, Rebecca, for joining us today. It was a great conversation on the CRE Weekly Digest. Thanks to our production team of Alyssa Lewis, Molly Farina and Josh Bruyning. Please join us every week as our LightBox team shares CRE News and Data in Context. Subscribe and share this episode with your colleagues in CRE and send your comments to podcast@lightboxre.com. Thank you for listening and have a great week. 

Manus Clancy: Let's go.