Navigating Tariff Policy, Reshoring, and a Shifting Global Landscape

After months of relative calm, the markets have been jolted back into volatility—with the S&P 500 entering correction territory amid tariff concerns and evolving global dynamics. Yet, as attention swings toward trade policy and economic nationalism, commercial real estate is playing an increasingly central role in how these changes manifest on the ground.

“We’re seeing a shift in focus—from interest rates and inflation to trade dynamics and global supply chains,” said Matt Jones, capital markets expert at Matthews Real Estate Investment Services. “This isn’t just noise, it’s impacting underwriting, asset values, and long-term investment decisions.”

Reshoring and Real Estate: Structural Shifts Underway

Perhaps the most notable consequence of shifting trade policy is the acceleration of reshoring. This movement is already reshaping the U.S. industrial landscape, with CRE positioned at the center.

“Every time tariffs are floated or global supply chains come into question, demand ticks up for industrial space,” noted Jones. “From manufacturing to logistics, companies are looking to control more of their supply chain domestically, and that starts with real estate.”

Industrial CRE, particularly in secondary and tertiary logistics hubs, has benefited most. Sale-leasebacks have surged as tenants seek liquidity to weather operational costs and uncertainty. Crypto mining has also become a growing demand driver, requiring power-heavy, flexible warehouse footprints in affordable markets.

Specialization, Free Trade, and Market Response

With the debate around tariffs often leans political, CRE professionals are looking at it through a different lends—focusing on economic fundamentals. “It’s less about ideology and more about how tariffs affect business investment,” said Jones. “Free trade and specialization have historically led to efficiency gains, and any deviation, while sometimes strategically valid, adds friction to the system.”

In the near term, inefficiencies from tariffs, can raise costs for tenants and operators alike, which trickles into cap rates, rent growth projections, and underwriting.

Lending Conditions: Shifting Underwriting and Strategy

As the macro narrative evolved, CRE financing continues to adjust. Industrial remains a favorite among lenders, particularly life companies and debt funds. Retail lending has grown more bifurcated, with strong appetite for grocery-anchored deals and increased caution around big-box exposure.

Multifamily

Multifamily financing remains highly competitive, with agency lenders still active—but no longer the only game in town. Banks and credit unions have gained momentum, tightening spreads and offering attractive terms to compete. “We’re seeing more flexible underwriting, particularly for new borrowers and smaller refinance requests,” said Jones. Larger banks and credit unions are emerging as leaders in this space. For bigger transactions facing capital stack challenges, CMBS has stepped in, often through aggressive rate buydowns to get deals across the finish line. Minimum debt yields rarely fall below 8.00%, making creative structuring critical in today’s rate environment.

Retail

Lenders in the single-tenant net lease (STNL) space are sharpening their focus on tenant credit and lease term. “There’s growing lender scrutiny around certain national retailers due to recent downgrades,” noted Jones, referencing tenants like Dollar Tree, CVS, and Walgreens. Still, credit unions have created pockets of opportunity by offering rate flexibility and prepayment relief for borrowers anticipating rate declines.

Local banks and credit unions are moving quickly on smaller strip centers and unanchored deals, while life companies and CMBS remain focused on larger, stabilized assets, particularly grocery-anchored centers, which continue to outperform. Big-box exposure, by contrast, is receiving less interest. Current life company spreads are ranging between T+120–220 bps, while CMBS pricing trends closer to T+220–300 bps. Many funds not seeking maximum leverage are opting for deep rate buydowns to achieve positive leverage, even if it means sacrificing substantial equity to secure favorable debt terms.

Self-Storage

As institutional exposure to office continues to fade, self-storage has emerged as a preferred substitute for banks and REIT core strategies. With stabilized income and low operating costs, the sector offers a compelling yield profile. That said, many lenders remain cautious above 70% LTV, and continue to prioritize quality assets with consistent performance and manageable OpEx. Life companies and CMBS are active for larger, stable portfolios. Still, limited market comps and saturation concerns, particularly in tertiary markets, pose challenges for newer funds looking to deploy capital at scale.

Bridge & Construction

Bridge and construction lending has become one of the most active corners of the CRE capital stack, fueled by private credit’s growing role. These groups are stepping in to fill gaps left by more traditional institutions. Some regional banks are also participating, offering competitive pricing but with longer diligence timelines. Terms remain highly deal-specific, with an emphasis on sponsorship strength, project feasibility, and a clear exit strategy. “This is where we’re seeing the most innovation in capital structuring,” said Jones.

Office & Hospitality

Conventional lenders remain largely on the sidelines when it comes to office and hospitality, with most activity concentrated in bridge loans or specialized conversion plays. “Stabilization is still a big question mark for a lot of office assets,” said Jones. Medical office, however, has proven to be a relative bright spot, benefiting from high tenant retention and strong cash flow characteristics. Hospitality remains challenged unless there’s a clear repositioning story or path to NOI growth.

Policy Uncertainty and Consumer Confidence

Recent positive macro data, including inflation cooling and job numbers within range, haven’t done much to lift consumer sentiment. “That’s where CRE gats hit indirectly,” noted jones. “Retail and multifamily performance are both highly sensitive to consumer confidence. If spending slows, so does rent growth.”

Consumer behavior is already shifting. Big box retail is softening, luxury spending is pulling back, and high-income earners are showing caution. This has knock-on effects for everything from mixed-use underwriting to lease-up assumptions.

Despite broader economic resilience, the uncertainty surrounding tariff policy and shifting alliances continues to weigh on consumer outlook, raising questions about the strength and timing of a recovery.

Real Estate as a Strategic Asset in a New Trade Environment

Whether through strategic reshoring or shifts in foreign investment, CRE is increasingly viewed as a key pillar of U.S. economic security. Tariffs, trade realignments, and re-industrialization efforts are pushing CRE, especially industrial and infrastructure-adjacent assets, to the forefront of long-term strategic planning.

Office, meanwhile, remains in transition. Lenders continue to show caution, with some selectively backing medical office or conversion-ready properties. Self-storage, on the other hand, is growing in appeal as lower-risk substitute for office exposure among both banks and REITs.

What CRE Investors Should Watch Next

“This market correction is more about recalibration than collapse,” said Jones. “Rates, geopolitical risk, and trade policy are all changing simultaneously, CRE is where that all meets reality.”

Looking forward, CRE investors and borrowers should pay attention to:

• The impact of continued reshoring on industrial absorption
• Lending competition between banks, agencies, and debt funds
• The role of crypto and digital infrastructure in shaping industrial demand
• Shifts in consumer sentiment and their impact on multifamily and retail
• The emerging preference for flexible, resilient real estate financing structures

CRE sits at the crossroads of economic policy. Ultimately it comes down to adaptability. Those who position themselves for where the economy is going, not where it’s been, will come out ahead.