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Navigating the Shifting Terrain of Tariffs and Costs In Commercial Real Estate

By James Wolcott and Robert Matt
May 31, 2025

A Year of Economic Crosswinds


With Q2 well underway, the real estate sector faces a uniquely complex economic landscape. Developers and investors are grappling with persistent inflation in construction costs, potential tariff adjustments on building materials, and the gradual expiration of key tax incentives that have long underpinned the industry’s profitability.

Rather than waiting for clarity, industry leaders are shifting from a reactive to strategic approach — adjusting their financial models, planning timelines and investment strategies to remain competitive in a landscape full of variables. The firms that plan best and adapt to the climate are likely to gain an edge.

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