Stuck in the Middle: Geopolitics Clouds Global Trade (Again)

Strait stress in the Middle East—these are the CRE updates you won't want to miss.

🗓️ June 27, 2025

Call it the Strait of High Stakes. The Strait of Hormuz—where 20% of the world’s oil supply sails through daily—is once again in the geopolitical spotlight as tensions escalate between Israel and Iran. While markets initially shrugged, crude oil prices have crept upward, and if disruption hits hard, some analysts expect a spike to $120+ per barrel. (Although James Bohnaker reminds us that the world is not exactly short on oil. Iran is the 5th largest producer, after the U.S., UAE, Russia and Canada. Saudi Arabia and the UAE collectively have 5-6 million barrels per day of spare production capacity.)

Kevin Thorpe has pointed out that if prices rise, it's not just a fuel problem—it’s an inflation problem, with ripple effects that could stall central banks’ rate-cut ambitions and slow global growth. Read up on what this may mean for property globally.

This matters for the wider built environment, too. Supply chains are the invisible architecture behind industrial and logistics real estate. Any instability near key shipping corridors threatens delivery timelines, cost structures, and demand for space. Global shippers are already flagging rising risks to commercial shipping across the Arabian Peninsula, which could force near-term reconfigurations and longer-term diversification. If disruption becomes the norm, expect reshoring, nearshoring, and more “mission-critical” location strategy from occupiers who can’t afford a stuck-at-sea scenario. Read more on global logistics and industrial interconnectivity and listen in for Kevin's perspective.

Mamdani upsets Cuomo in the Big Apple mayoral primary Real estate was the S&P 500’s worst performer Wednesday, led by a drop in office and multifamily REITs after Zohran Mamdani’s primary victory. Mamdani has pledged a rent freeze and a progressive housing agenda. However, analysts say, "a lot can change" between now and November.

💼 The purpose of place

In the office sector, cities across Australia are seeing a growing divide between winners and everyone else. Tenants are clustering in vibrant, central precincts with easy commutes, modern ESG-compliant buildings, and floors high enough to earn skyline bragging rights. High-rise vacancy in Sydney’s core sits at just 5%—less than half that of low floors and a third of similar space outside the core. Read how the office sector is reshaping cities in Australia.

Zoom out What’s changing? Office isn’t about square footage anymore—it’s about visibility, flexibility, and staying close to the action. Tenants are increasingly making deliberate choices to place themselves in areas that reinforce culture, connectivity, and convenience. In other words: a skyline view alone won’t cut it.

“I can’t remember the last time we had a conversation about cost per square foot. We’re moving into metrics that matter, which are around experience,” said Shelley Boland, global head of real estate at Standard Chartered, in conversation with Despina Katsikakis . The pair discussed the company’s new outlook that supports almost 990,000 colleagues across 50 markets on the Purpose of Place podcast.

So whether you’re renewing leases in Barangaroo or reevaluating in Midtown Manhattan, the question isn’t “Is office dead?”—it’s “Does your office still work for you?” After all, just 55% of employees who believe the office should support wellbeing say it actually does. See what 6,000 employees have to say.

🔎 Ideas we're watching

Paris is (sometimes) a good idea The most exciting CRE hospitality moves in France may lie beyond the capital, Jean-Christophe Charolle told Green Street News: Europe this week. Foreign investors often miss out for lack of local insight—but markets like Reims, Nice, and Marseille offer strong business-leisure demand, less competition, and returns that can outpace Paris or Cannes.

Fancy a rate cut? The economic position of U.K. households is looking up—and growing confidence is translating to buyer activity in the housing market. Meanwhile, the Bank of England cut rates again in June (the fourth cut since last summer). Get the full residential forecast.