The Logistics of Tariffs and the Supply Chain Reaction

April showers bring May flowers. These are CRE updates you won't want to miss.

📅 May 16, 2025

The sigh of relief heard ‘round the world

China and U.S. mutually reduce planned tariffs “Wait and see” culture will continue, but when news broke Monday morning that the two administrations would reduce each of their reciprocal tariffs by more than 75% (at least, for 90 days), Wall Street rejoiced. Predictions for an impending recession halved, moving from a 65-70% possibility to now closer to 30%.

Chief Economist Kevin Thorpe talks through this "unequivocally good news":

🚢 The logistics of logistics

We’re not quite in the clear Prices will probably remain higher than usual. With all the panic importing that happened in April, we’re now seeing a healthy inventory of goods in some markets as retailers prepared to weather the tariffs. Logisticians and economists expect the tariff whiplash will affect prices heading into the back-to-school and holiday shopping seasons.

Discussions at Cushman & Wakefield’s INTERCHANGE industrial conference last week (recap in the works) zeroed in on the relationship between warehouse labor, warehouse space, and inventory—a balancing act that’s crucial in maintaining resilience and adaptability, particularly in today’s volatile economic environment.

Rising inventory levels from just-in-case strategies, adopted amid supply chain disruptions, demand more space and labor. Yet, these expansions come with significant costs, especially as labor shortages and rising wages challenge operational budgets.

🏠 Much ado about multifamily

Rents are stabilizing in the U.S. after a flurry of headlines, and investors are still recalibrating. The challenge? Maintaining returns amid potentially cooling demand and elevated interest rates. But the good news is that supply pipelines in regions like the Sun Belt remain strong, giving renters more breathing room and landlords better long-term optimism.

💡Spotlighting those keeping the lights on

On May 14, our industry celebrated World FM Day—a moment to recognize the behind-the-scenes heroes keeping the built environment running. With the global facilities management market set to reach $2.28 trillion by 2032, this is a workforce that is becoming more vital than ever. Our team hit the ground at a client site to walk in their shoes for a day.

🔍 Other ideas we’re watching

Comparing office demand globally... Matthew Bouw joined the Financial Times to discuss how cultural differences across Asia Pacific may have driven significantly higher post-pandemic return to office rates compared to Europe and the Americas. Check out the full project.

Your turn...

In a market defined by uncertainty, how do real estate leaders make strategic bets without sacrificing near-term performance?

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