**Walker Webcast Recap: Tariffs, Markets, Economics, and CRE with Peter Linneman**
On April 16, the Walker Webcast returned with its 21st installment of the widely followed series, “The Most Insightful Hour in CRE.” The episode featured Dr. Peter Linneman, founder of Linneman Associates, in conversation with Walker & Dunlop Chairman and CEO Willy Walker. Broadcast live from the YPO Multifamily Symposium in Chicago, the episode garnered significant attention with over 14,000 registrations.
The conversation opened with a discussion on tariffs, quickly transitioning to broader economic topics such as consumer confidence, oil prices, Treasury Notes volatility, and their cumulative impact on the commercial real estate landscape.
### Tariff Shockwaves and Market Uncertainty
Both Walker and Linneman agreed that the recent announcement of substantial tariff hikes came as a surprise to markets and the public alike. Linneman emphasized that markets struggle under uncertainty, which increases risk premiums. The newly raised tariffs were far larger than projected—rising from an expected 3% to nearly 10%. With this adjustment, tariffs effectively function like a tax, now impacting roughly 10% of the economy. Linneman noted this could shrink GDP by about 1.7%, a significant decrease relative to the average annual growth of 2.3%–2.5%.
“The weighted average now means we’re paying close to $20 in tariffs for every $100 we import,” Linneman explained. However, he pointed out a potential silver lining: the inflationary impact of these tariffs would likely be a one-time event unless further increases are introduced.
### Implications for Commercial Real Estate
Turning to real estate, Linneman focused on how these macroeconomic shifts are influencing different CRE sectors.
Regarding multifamily, Linneman said, “In 2024, the market was balanced. We had historic unit deliveries, and they were all absorbed.” However, he warned that imbalances could begin to return by 2026 due to escalating housing costs. These higher costs might push more people to rent for longer periods. “People will stay in multifamily longer—whether they want to or not—while they build more equity to afford rising home prices,” he said. This, combined with undersupply in the single-family housing market, makes Linneman optimistic about the future of multifamily.
Retail also remains a positive sector in Linneman’s view. “I like retail where people want to shop,” he said, emphasizing that localized demand continues to drive success.
In contrast, the office sector presents a more nuanced picture. Linneman noted that out of 44 tracked markets, 17 are showing slow signs of improvement. “Rent and occupancy are crawling back, and capital markets are showing early signs of returning interest. However, there’s still considerable uncertainty,” he said.
### Strategy and Recommendations
Wrapping up the conversation, Linneman offered strategic insights for investors navigating today’s landscape.
His advice? If you’re not trying to flip properties, now is still a viable time to buy—provided you’re ready for potential challenges. “Keep your leverage low,” he cautioned.
He also urged viewers to rely on market fundamentals rather than fear-driven narratives. “Leave the fright house and tune down the noise,” he said. “Say what you will, but employment was solid in Q1, unemployment claims have been stable, and inflation is trending downward.”
On-demand replays of the April 16 Walker Webcast are available on Walker Webcast’s YouTube, Spotify, and Apple channels. Subscribe to receive invites, replays, and resources from new episodes each week.
