A new force is reshaping the landscape of commercial real estate forecasting: the United States’ evolving tariff policies. These changes have injected fresh volatility into the markets, pushing analysts to develop innovative strategies to track and interpret the unprecedented shifts triggered by the new tariffs.
Among those adapting to this new reality is Ryan Severino, chief economist at BGO. Rather than relying solely on his established machine learning models to analyze the latest tariff developments, Severino reengineered his approach to keep pace with the unpredictable environment.
Specifically, as recent tariff changes rendered traditional data and past patterns less reliable, Severino supplemented his models by integrating fresh behavioral signals and drawing on decision patterns from previous administrations. This adaptive strategy enabled him to simulate the current administration’s negotiation tactics with greater nuance, providing a sharper, real-time perspective on how evolving trade policy could ripple through the commercial real estate sector.
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Armed with these insights, Severino reached a compelling conclusion.
“The model ultimately concluded that, one way or another, this administration is not going to back down from tariffs either, irrespective of what happens,” Severino tells GlobeSt.com. He added that the models predicted the administration would continue to push the envelope, using every available avenue—much like recent moves on steel and aluminum—and challenging restrictions in court whenever possible. “But one way or another, the model was pretty confident that we're not going to find ourselves in September with the tariff rate where it was back in March before.”
Severino’s outlook on the broader commercial real estate market remains cautiously optimistic. He observes that CRE markets are “recovering,” albeit at a slower pace than usual, which he attributes to lingering uncertainty. Potential occupiers are delaying decisions until the future seems clearer, while landlords are subjecting would-be tenants to heightened scrutiny. Questions about a company’s location of incorporation, business type, production sites, and tariff risk are lengthening the time it takes to negotiate and sign leases.
Equity capital markets are also feeling the strain. Buyers are demanding longer due diligence periods, some deals are being repriced, and others are falling through entirely. “Consequently, pricing has retrenched in recent months,” Severino wrote in his projection. Transaction volume has remained flat since the first quarter of 2025. Still, despite the uncertainty surrounding tariffs—which may persist into 2026 and create only a “marginal impact," Severino and BGO anticipate a broad recovery in CRE capital markets. Over the past twelve months, total returns in the first quarter of 2025 were positive across all sectors, signaling resilience amid ongoing challenges.
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