Industry Leaders Gauge Impact of Potential Slowdown in U.S. GDP Growth

Global economic uncertainty and volatility have not left the world’s largest and strongest economy untouched. Headwinds have buffeted the U.S. this year, albeit to a lesser extent than some other major economies. Against that backdrop, Connect CRE asked industry leaders to respond to predictions from the World Bank of a slowdown in U.S. GDP growth and how they’re advising clients to respond in the event one occurs. Below are insights from Jenna Unell, senior managing director, Greystone Servicing Company LLC; and Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC. On a related question pertaining to changes in globalization, read what Keith Lampi, CEO and President, Inland Real Estate Investment Corporation, has to say.

The World Bank has forecast a slowdown in the U.S. growth rate. Do you agree, and if so, what advice on hedging against a slowdown are you providing to clients?

Jenna Unell: Yes, the U.S. is facing a potential economic slowdown as a result of tariffs, inflation and U.S. immigration policy. It seems unlikely that the imposition of tariffs will have any significant impact on U.S. manufacturing and, will, in fact, make manufacturing in the U.S. less cost effective due to the global inter dependencies in most manufacturing industries. Cost of goods and services will rise in some cases not only because tariffs are being passed through, but also because labor costs will be higher and or not available due to the change in immigration policy and rescission of protected status on a large number of people who are currently gainfully employed in various sectors of the economy such as construction, hospitality, and senior housing.

Notwithstanding a potential slowdown, investors can find opportunities in distressed scenarios. Properties that have been foreclosed will be liquidated at their reduced market value providing an opportunity to acquire real estate at a reduced basis and strategically reposition it to realize some upside. Other opportunities include providing rescue capital. In addition, real estate is local, so diversification of location of investments reduces overall risk. Lastly, certain property types are more resilient than others. Demand for multifamily housing remains strong as does industrial properties.

Tony Chereso: The World Bank now expects the U.S. economy to grow at about 1.4% in 2025, down from 2.8% in 2024—a substantial slowdown tied to trade tensions and tariffs.

Diversify across property types (to start with the basics) to shield our investors from sector-specific demand hits. Multifamily and essential-use assets like self-storage, necessity retail, and healthcare get priority over office, hotels, and discretionary. Also, we are seeking to lock in fixed rates where possible, or to use interest rate swaps and caps to hedge volatility when necessary. That way, if rates rise or stay stubbornly high, financing costs remain manageable.

Are there structural changes to globalization underway that could reshape the relative performance of asset classes over the next decade?

Keith Lampi: Some interesting dynamics to watch over the next decade include: re-shoring and its impact on industrial warehouse and distribution real estate, and healthcare delivery and its integration with technology and AI, and how that integration may impact the supply and demand for both assisted living facilities and medical outpatient buildings.

From a macro perspective, the slowing birth rate and aging population are creating a backdrop for fundamentally slower GDP growth and inflation, which is likely to bring with it lower interest rates and fewer dynamic investment opportunities. We see sectors driven by demographics as the winners in this environment. These include Self-Storage, Multifamily (especially BTR and MHC), Student Housing, and Healthcare.