The April 16 Walker Webcast featured “The Most Insightful Hour in CRE, Part 21,” with guest Dr. Peter Linneman and hosted by Walker & Dunlop Chairman and CEO Willy Walker. The highly anticipated episode was transmitted live from the YPO Multifamily Symposium in Chicago, with more than 14,000 registrations.

The webcast began with a tariff discussion and also focused on consumer confidence (which has declined), economic issues (including oil prices), Treasury Notes (which remain volatile) and, of course, the overall impact on commercial real estate.

About those Tariffs

Walker and Linneman agreed that the magnitude of the announced tariffs caught both the markets and the public off guard. One reason was that markets don’t do well with uncertainty. “No one can figure out what’s going on, meaning the risk premium goes way up,” Linneman observed.

That uncertainty came about in that the announced tariff increases were larger than anyone had expected, up from the anticipated 3% to 10%. If that amount stays in place after the pause, “tariffs are closer to $20 on every $100 we import; that’s the weighted average,” Linneman said.

It also means that tariffs—which Linneman considers taxes—are being raised on 10% of the economy. That, in turn, could reduce the GDP by 1.7%. “In a normal year, we grow 2.3% to 2.5%,” Linneman said. “With this, you’re wiping out three-fourths of a normal year’s growth.”

If there is a bright spot to any of this, it is that tariff consequences would occur only once. “Unless we keep raising the tariffs, there’s a one-time shock to inflation in excess of one percentage point,” Linneman explained.

The CRE Analysis

When addressing tariffs and economic impacts on commercial real estate, talk turned to the single-family and multifamily sectors. “In 2024, multifamily was a balanced market,” he said. “We had historic deliveries, and all of it was absorbed.”

But things will unbalance again, beginning in 2026. The increased costs of homeownership mean it’s less expensive to rent. “People will deal with this by staying in multifamily longer, whether they like it or not,” according to Linneman. “They’ll work to build up a bigger equity cushion; instead of putting 10% down on a home, they’ll put 20% and help bring the costs down.” In short, “I feel good about multifamily,” Linneman explained. “People have to live somewhere, and we still have a massive shortage of single-family that’s not going away.”

Linneman said he also is comfortable with retail. “I like retail located in wherever people want to shop,” he said. “I think the economy will grow but stay tuned to see how large the tariff impact might be.”

One interesting viewpoint involved the office sector. The Linneman Letter reported that the office market in 17 of the 44 markets is slowly improving. “As it relates to office, rent and occupancy are improving really slowly, and they’re improving really slowly in the capital market sense,” Linneman said. Those with institutional money are starting to go back into office, but “there’s still a lot of uncertainty,” Linneman said.

Forward-Looking Recommendations

Linneman offered advice to YPO attendees and webcast listeners. First of all, despite everything, “unless you’re looking to flip, go in and buy, but be prepared if things go wrong,” he said. “Keep your leverage low.”

Second, make buy/sell/build decisions based on fundamentals rather than noise or panic. “Leave the fright house and tune down the noise,” Linneman said. “Say what you will, employment was pretty strong in the first quarter. Unemployment claims (announced) last week were very solid, and inflation is down.”

On-demand replays of the April 16 Walker Webcast are available through the Walker Webcast channels on YouTube, Spotify and Apple. Subscribe to get invites, replays and articles for new Walker Webcast episodes every week.