FIRST DRAFT LIVE: Peter Linneman Breaks Down CRE’s ‘False Narratives’
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Commercial real estate has had a challenging year. From interest rates being stickier than expected and tariffs going on a roller coaster to continued office vacancies and negative multifamily rent growth, it has not always been easy to see the bright side in a year defined by uncertainty.
But economist Peter Linneman said some negative headlines have been missing the bigger picture.
This week, he sat down with Bisnow Editor-in-Chief Mark Bonner to discuss what CRE professionals should really be focused on in the cacophony of troubles that have been dominating the news cycle.
Linneman said he did his own analysis of the impact of the tariffs so far, and that it’s not as significant as some might think. He took the tariffs collected by the U.S. government in the last six months and divided them by the imports recorded. He found that while all of the simulations say the tariff rate should be about $16 to $18 per $100, that was not the case.
He said the actual tariffs paid is about $6.50. That is a big leap from $3 pre-tariff, but it is still a far cry from the market’s worst fears.
He also said there’s a false narrative that since apartment rents are flat and occupancy is soft, demand must have weakened.
“Demand has stayed just fine,” Linneman said. “It’s just that it got spread over a bigger supply, and that’s what swung things from being very robust to very weak. I don’t think the capital markets have figured out that it wasn’t demand, it was all supply.”
View the rest of their conversation here:
