Welcome To Halftime: 40 CRE Execs Talk Tariffs, Delays — And A Year That Hasn't Gone To Plan

Well, that was one hell of a first half.

Back in January, the pregame talk echoed with bravado. Fifty-six industry titans had just told us that once the U.S. presidential election dust settled, interest rates would drift lower, capital would unfreeze and 2025 would be the year to thrive.

Six months, 166 executive orders, a flurry of ever-changing tariffs, frozen interest rates and one big, beautiful bill later, the mood has clearly shifted. Everyone knows who to thank—or blame.

The tariff roller coaster and the economic uncertainty that followed have replaced election anxiety as the nagging headline, interest-rate cuts are still a mirage, and the bid-ask gap has barely blinked.

In boardrooms from Newport Beach to London, the halftime mood board is less touchdown dance and more film-study grind: commercial real estate is rewriting budgets, renegotiating leases, lengthening underwriting and waiting—and waiting some more—for price discovery.

Yet the 40 real estate C-suite executives in this halftime report say they're persisting by leaning into adaptability. Industrial owners are trading leverage for triple-net deals, multifamily lenders are shifting toward CRE credit, and retail brokers are prepping Plan C before Plan A even lands. Some players are still in hibernation; others are pouncing on dislocation. "Flexibility" shows up in nearly every response.

Three themes jump off the page. First, higher-for-longer is no longer a forecast—it's the ambient weather, and strategies have normalized around it. Second, the distress wave has been deferred, and nearly everyone mistimed when assets would hit the market. Third, tenant demand is bifurcating, proving that location and product quality still outrank macro noise.

In January, we asked how our leaders would win the year. Today, we ask how they'll finish it.

Welcome to halftime.

— Mark F. Bonner, Editor-in-Chief Responses have been lightly edited for length and clarity.

Tariffs keep whipsawing. Are you fast-tracking deals, hitting pause or rewriting budgets to stay ahead of the chaos?

We're currently allocating primarily to lightly transitional CRE that requires only small improvement budgets, so cost swings have minimal impact on the property's overall expense or improvement budget. We're also focusing on NNN industrial.

We're six months into 2025. Has your playbook changed, and if so, what's the new game plan?

As construction costs have continued to climb and the construction workforce has stayed constrained—driving expenses up further—we've pivoted to allocating more of our lending capacity to CRE transactions than to multifamily, whereas the prior year it was the opposite.

What's one assumption you had in January that hasn't held up?

At the start of the year, we thought interest rates would start to drop sooner than they have—but I think we were all in that boat. Now that we're staying in this seemingly never-ending higher-rate environment, we believe there will be a lot of opportunity to buy properties at a huge discount to replacement value. We think we're approaching a once-in-a-generation window that will provide both debt and equity opportunities.

—Holly MacDonald-Korth, CEO, KDM Financial Sector: Lending · City: Miami · Years in CRE: 19