Days into a tenuous ceasefire between the U.S. and Iran, the impacts of the war for commercial real estate are becoming clearer.

Oil prices remained at around $90 per barrel Friday, down from last week but still adding to inflation, which surged to 3.3% in March because of energy prices. Meanwhile, companies are starting to buy supplies in advance and grab industrial space to store materials to hedge against higher transportation prices, according to a new Colliers report.

“While U.S. commercial real estate has limited direct exposure, indirect impacts are being seen mainly in the industrial and retail sectors,” Colliers researchers Steig Seaward and Craig Hurvitz wrote.

The two-week ceasefire that started Tuesday was supposed to temporarily reopen the Strait of Hormuz, through which around one-fifth of the world’s oil travels. But Iran has maintained a chokehold on the narrow strait in the Persian Gulf, frustrating President Donald Trump.

A resolution appears far away, creating inflationary pressures for U.S. CRE that could drive interest rates upward and reduce lenders’ appetite for risk.

Increased inflation expectations have pushed the 10-year Treasury yield higher — it was at 4.3% Friday afternoon, up roughly 30 basis points since early March — indicating that an interest rate cut is increasingly unlikely and creating an environment where lenders are pickier about their investments, according to Colliers.

Higher cost of capital will reinforce conservative underwriting, meaning only best-in-class assets with consistent cash flows will net refinancing deals.

The dynamic could leave CRE stuck in a similar position to the post-pandemic years, when lenders and borrowers were waiting for interest rates to come down before transacting.

“The conflict is more likely to prolong an environment of selective liquidity and pricing discipline than to trigger an abrupt repricing,” Seaward and Hurvitz wrote.

But impacts for CRE go beyond capital markets, according to the Colliers report.

Unpredictability in the Strait of Hormuz is resulting in slower deliveries, adding to increasing costs triggered by fuel price changes. In addition to increasing shipping costs, fuel prices are adding to transportation costs along highways and cargo flight paths.

Oil is also a key component for making metals, chemicals and plastics, potentially resulting in higher production and base material prices.

So as retailers scramble to speed up imports and keep increasing materials costs down, they are bulking up their supplies and locking down warehouse space as they seek ways to keep business steady.

The uncertainty may also lead to increased nearshoring, according to the report — although even that may not fully mitigate cost increases.

“Defensive strategies to ensure operational flexibility are expected to persist, with firms prioritizing resilience,” the report says.