California Developers Rethinking Projects Amid Tariff Uncertainty
As global trade faces increasing pressure from tariff uncertainty, the Summer 2025 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey reveals significant impacts across the state’s real estate sector. According to the survey, 36% of developers have either delayed or canceled commercial real estate (CRE) projects due to rising construction costs and ongoing global trade tensions.
The effects of tariffs and disrupted supply chains have led to heightened caution among industry professionals. A striking 85% of respondents expressed a more conservative outlook on initiating new developments in California. Additionally, 44% of developers predict that distress levels in CRE capital markets will continue to grow over the next year.
“Tariffs and lack of clarity on trade policies are certainly top of mind for real estate investors and developers as we head into the second half of the year,” said Spencer B. Kallick, partner at Allen Matkins. “This uncertainty is leading real estate developers and investors to think long-term about their development plans and shift their focus to opportunities and sectors that show resilience, particularly those aligned with e-commerce, logistics, and residential.”
These findings highlight a critical pivot in California’s commercial development landscape as industry professionals re-evaluate projects in light of ongoing economic uncertainty.
