The impact of tariffs on the economy

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The impact of tariffs on the economy link

• Tariffs are raising production costs, which will likely hurt corporate earnings in the coming quarters. This adds pressure on the S&P 500 as companies adjust to higher costs and slower spending.

• Elevated uncertainty from tariffs is already weighing on household and corporate decisions. Even with some recent easing, soft economic data is deteriorating and may soon spill into hard data.

• The March employment report will be key, as it covers a period of heightened tariff concerns. Its outcome may reveal early signs of how deeply tariffs are affecting jobs and overall economic momentum.

International migration driving gateway city growth link

• Of the 2.2 million people added to large U.S. metros in 2024, 2.1 million came from international migration. That accounts for 96% of total population growth in those areas.

• Gateway cities like Boston, New York, Seattle, Washington, D.C., and San Francisco grew faster than the U.S. average. Los Angeles and Chicago also saw population gains for the first time in over five years.

• This population rebound signals renewed demand across all commercial real estate sectors in major metros. The trend contrasts sharply with the outmigration seen during the pandemic years.

Industrial property sales to occupiers rose 32% in 2024 link

• Industrial property sales to occupiers rose 32% in 2024, with the average price reaching $152.42 per sq. ft. Over 50% of these acquisitions were for buildings constructed before 1980.

• Buyers are opting for ownership to lock in long-term cost savings, gain tax benefits, and avoid rent increases or lease terminations. Customization and appreciation potential are also driving the trend.

• With 21,300 leases set to expire over the next 3 years—12,600 in pre-2000 buildings—supply is expected to grow. This shift means occupier purchases will play a bigger role in future industrial net absorption.

Nearly one-third of build-to-rent units under construction in 14 submarkets link

• As of mid-March 2025, 78,000 build-to-rent (BTR) units were under construction nationwide, with one-third located in just 14 submarkets. The west Phoenix submarket of Avondale/Goodyear/West Glendale leads the country with 4,568 BTR units underway.

• Texas dominates the list, with six submarkets including Allen/McKinney, which has 2,312 BTR units under construction and has grown its existing unit base by 61.2% in five years. Austin’s Round Rock/Georgetown also ranks in the top five with 1,936 BTR units.

• Phoenix has five submarkets in the top 14, with Deer Valley and Pinal County building 1,739 and 1,611 BTR units respectively. Southern markets like Tampa, Atlanta, and Raleigh/Durham also show strong BTR activity.

High-End Travel Bookings Are Up link

• Luxury travel is expected to grow at a 7.4% CAGR through 2035, even as airline earnings show signs of consumer softness. Delta cut Q1 2025 revenue growth projections to 3–4%, but premium and international segments remained strong.

• The top 10% of earners now drive nearly 50% of consumer spending and 34.3% of U.S. GDP. Their continued spending supports demand for upscale hotels, restaurants, and other hospitality real estate.

• Deloitte found that 75% of high-wealth individuals plan to use hotels for leisure in the next 3 months, and 69% expect to fly. United and Southwest Airlines both project strong 2025 revenue per seat mile growth, indicating resilience in premium travel demand.

What $1 million can buy in prime real estate around the world link

• In Monaco, $1 million buys just 205 square feet, the smallest amount of space among 20 global cities. New builds in Monaco average $39 million due to extreme demand and tax advantages.

• Dubai saw the biggest drop in buying power since 2014, down 59%, followed by Miami at 54% and Lisbon at 51%. A $1 million home in Dubai in 2020 would now cost $2.7 million.

• London was the only city where buying power grew significantly, rising 43% over the last decade. This was driven by currency shifts and a correction in high-end property prices.

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