SVN Desert Commercial Advisors’ CRE market update for June 25, 2026 breaks down the latest economic data — including PCE inflation, Fed rate decisions, and Q1 GDP — and what these signals mean for commercial real estate investors in the Phoenix metro area.
The Federal Reserve held rates steady at 3.50%–3.75% for a fourth straight meeting, with new Chair Kevin Warsh striking a notably hawkish tone. Updated FOMC projections now point to a median year-end rate of 3.8%, with most participants expecting at least one hike before year-end and inflation forecasts revised sharply higher to 3.6% PCE. Compounding the pressure, Middle East conflict has disrupted global oil supply and pushed Brent crude toward $105 per barrel, keeping inflation elevated and rate relief firmly off the table for CRE borrowers.
Property price gains of 1.6% year-over-year in May offered a bright spot, led by Suburban Office and Industrial, while Multifamily continued to slide. CMBS delinquencies remain elevated at 7.55%, with Office the most distressed sector at 11.53%. On the positive side, retail sales surged 6.9% year-over-year, independent landlord collections turned positive on an annual basis for the first time in three years, and slowing multifamily construction suggests the supply-driven rent correction may be approaching its floor — setting up a more favorable outlook heading into 2027.
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