Bend, Not Break: Investing in Real Estate Amid Economic Uncertainty

In an increasingly uncertain environment, investors should be more selective, prioritizing investments that can offer durable income and seek to perform even in flat or faltering markets.

Until recently, commercial real estate appeared poised for a long-awaited rebound. However, 2025 has revealed a new reality: Uncertainty has become structural. Trade tensions, inflation, recession risks, and interest rate volatility have unsettled markets and slowed decision-making. Traditional strategies—broad, momentum-driven approaches, cap rate compression, rent growth—no longer provide a reliable foundation. A disciplined investment process, grounded in local insight and operational excellence, matters more than ever.

PIMCO’s recent Secular Outlook, “The Fragmentation Era,” depicts a world in flux, where shifting trade and security alliances create uneven regional risks.[1] Geopolitical tensions and tariffs dominate in Asia, especially China, which is shifting to a lower growth path amid rising debt and worsening demographics. In the US, key headwinds include stubborn inflation, policy uncertainty, and political volatility. Europe contends with high energy costs and regulatory shifts, but rising