But I’m watching two caveats that could shake that thesis.

When the Trump administration announced sweeping tariffs on April 2, the immediate reaction across markets was predictable: volatility surged, equity indices swung wildly, and conversations in capital circles turned toward downside protection. As someone who spends every day in the world of commercial real estate, I believe CRE may emerge from this moment as one of the more stable, attractive asset classes for investors looking to navigate uncertain waters.

Manus Clancy, head of data strategy at LightBox, recently shared some insights that support this view. His analysis—alongside data from LightBox’s CRE Activity Index—reinforces what I’ve seen in our own pipeline: a sector that is not only weathering the storm but quietly gaining momentum.

According to Clancy, the first quarter of 2025 brought intense volatility: interest rates rose sharply, equities ricocheted, and macro signals turned cloudy. And yet, CRE activity surged. As he put it, “The LightBox CRE Activity Index hit a multi-year high in March.” That index, which tracks appraisals, environmental reports, and listings, is often a leading indicator of deal activity—and it suggests demand for commercial property is strong and growing.

Why? In part, it comes down to insulation. Existing CRE assets—especially stabilized properties—are less exposed to tariff-driven cost increases than new developments or consumer-facing industries. A fully leased multifamily building isn’t facing the same margin pressure as a manufacturing plant sourcing materials abroad. Sure, landlords are still replacing carpets and dishwashers, but those costs are modest compared to the tariff exposure in apparel, electronics, or construction.

When I break it down by property type, the picture gets even clearer.

Multifamily remains a standout. It’s a stable, need-based asset class with limited reliance on global supply chains. Industrial properties like logistics centers and self-storage facilities are similarly well positioned. Long-term leases with credit tenants (think Amazon, FedEx) provide a cushion. Even senior housing and student accommodations—while nuanced operationally—are largely shielded from the immediate impact of tariffs.

That said, I’m not naïve about the risks.

There are two caveats that could knock CRE off its current trajectory:

First, if lenders get spooked and pull back—as they did in the early days of COVID or after SVB collapsed—refinancing could become a serious hurdle. Capital markets are still sensitive, and any sign of contagion in debt markets would ripple across our industry fast.

Second, if tariffs persist and drag the economy into a prolonged recession, even the insulated sectors won’t be immune. Industrial might look strong today, but a broad economic slowdown hits demand, rent growth, and leasing velocity—no asset class is bulletproof.

Still, LightBox’s latest CRE Activity Index gives me real optimism. The index climbed to 104.4 in March, its highest reading since June 2022 and only the second time it’s cracked triple digits in nearly three years. That includes a 4.7% month-over-month gain and a massive 25.2% year-over-year jump. It tells me that investors are acting—not waiting—despite the macro noise.

Listings have more than doubled since the end of 2024. Environmental reports and commercial appraisals are rising too. Lenders, while cautious, appear to be getting more active again. These are not speculative signals—they’re transactional ones. They suggest CRE is becoming a magnet for capital in a world where few assets feel safe.

Of course, not all segments are created equal. I’m watching hotels closely—travel patterns are vulnerable in a recession, and rate compression is real. Retail remains the weakest link. Many operators are still fighting the same structural headwinds they’ve faced since 2015, and tariffs could accelerate closures in already vulnerable locations. Office is in flux, but some stabilized assets with the right tenant mix may find equilibrium.

The bottom line? If you’re an investor looking for yield and relative stability, commercial real estate is increasingly where the smart money is going. Just don’t forget the two warning signs on the horizon—and position accordingly.

—Daniel Kaufman

www.danielkaufmanre.com