Automotive at a Crossroads: The Industry Reacts to Tariffs

Don't get caught asleep at the wheel. These are the CRE updates you won’t want to miss.

🗓️ August 15, 2025

The call’s coming from inside the house. If Ford’s recent media blitz is any sign, the auto sector is in retool mode under tariff pressure. CEO Jim Farley said this week that Trump’s tariffs will hit Ford with a $2 billion burden in 2025, a $500 million jump from its previous estimate—because cut-rate import duties on (mainly) Japanese and South Korean vehicles give rivals a ‘meaningful’ advantage. That squeeze is fueling real strategy shifts across manufacturing and real estate.

This political pressure is already creeping onto dealership lots, too. After an initial stall (auto companies tried to shoulder the cost increase at first, but it hasn’t been sustainable), tariffs are now contributing to climbing new-car prices. That’s turned sticker shock into a longer-term reality for buyers—not only according to brand or origin, but by vehicle type, too. Get Jason Price 's take on how tariffs will affect the industry and property.

⚙️Industrial shifts gears

In the latest CRE industrial data, the share of build-to-suit (BTS) deliveries have nearly doubled from 17% one year ago to 30% in the first half of 2025—a five-year high. Meanwhile, the share of spec projects fell by around 10% since the beginning of the year, signaling broader shifts in production strategies across industries beyond the automotive sector. Get the latest data on your local market.

Vacancy rates ticked up 20 basis points in Q2 in the U.S., and rent growth slowed to 2.6%—its weakest since early 2020. Coastal markets like the Inland Empire (southern California) saw negative net absorption, even as inland hubs—like Ford’s Kentucky retool zone—held stronger. Automotive manufacturing is expected to continue to be a strong driver of occupier demand across EMEA and APAC—not only demand for space to host vehicle production and distribution, but for the supply of parts and after-sales care, like maintenance.

Geopolitical flux, tariffs, EV pivots, rising consumer prices, and increasingly regional production models are all contributing to redrawing the global industrial and logistics CRE map—one plant, lease and policy movement at a time. Curious about the state of global logistics and industrial? Sounds like you need a Waypoint—read our outlook here.

Is the Golden Gate City…on the way up again?

A poster child for the worst of the COVID-era urban decline, San Francisco has caught a lot of flak for its downturn as it battled a tech exodus and many, many empty storefronts and offices downtown. But vacancy rates can't tell you everything about the energy on the streets themselves.

Union Square and Maiden Lane are starting to buzz again. Executive Vice Chairman Kazuko Morgan believes that the early success of stores like Nintendo and Shoe Palace are proof that these historically hot retail zones have made it over the hump. POP MART, the Chinese toy brand behind Labubu dolls, is slated to open in the coming months, while Zara plans a new four-story flagship at 400 Post Street in 2026, signaling confidence in the city’s retail sector. Read the full SF Chronicle story.

🔎 Other ideas we're watching

For the plot Experience is the new amenity, according to recent research that shows top-performing properties are leaning in to the (brace yourself) “Flight to Quality” trend. With concierge-style service, curated programming, wellness offerings and community activations that go far beyond the anticipated, these perks aren’t just nice-to-haves—they’re driving retention and influencing leasing decisions. Read on for insight into what tenants want next.

Refis rule the roost 72% of YTD loan origination is refinancing—highest since 2000—signaling lenders’ quiet push to stabilize markets, triage maturing office debt, and slowly tee up fresh acquisitions. Check out Abby Corbett, CRE ’s analysis in this week’s Behind the Numbers.

Buona notizia Southern Europe has seen a massive 32% YOY surge in CRE investment volume. Italy led the charge (+46%), fueled by booming hospitality and retail sectors, while Spain (+16%) and Portugal (+70%) also saw strong gains. Anna Strazza reports that investor appetite is being driven by tourism growth, retail resilience, and selective plays in office, logistics, and living assets. Get the full outlook in the Southern Europe Investment Overview.