Q1 US CRE activity sprouts, but tariffs weigh on recovery

Commercial real estate investment climbed on a y/y basis in Q1, but recent surveys revealed that the unpredictability of policy changes and tariffs have dampened investor confidence. We expect this to weigh on Q2 activity, before continued improvement later in the year. Importantly though, when the recovery resumes, narrow yield spreads and slow economic growth are likely to keep it relatively restrained when compared to previous recoveries.