Signals on Private Real Estate amid Trade Turmoil

Commercial-property investors are assessing the potential impact of trade turmoil on directly held investments following the April 2 U.S. announcement on tariffs and subsequent extreme volatility in equity and fixed-income markets.

Direct investments in commercial real estate (CRE) are slower to react to market shocks, due to less frequent valuations and the smoothing effects of appraisal-based pricing. Using a daily priced liquid real-estate index may provide an early signal on valuation trends in direct CRE into the rest of 2025, as over the last two decades these liquid indexes have generally served as a leading indicator.¹

Clues on valuation shifts

Between April 2 and April 8, the MSCI USA IMI Liquid Real Estate Index fell by 8.9% and even after the April 9 announcement of a tariff pause remained 4.6% down by the close of April 21. The indexes for the U.K. and Europe also posted notable declines, of 6.4% and 3.3%, respectively, but have since regained all lost ground.

As tariff policies remain in flux, asset owners and managers can monitor faster-moving indicators on real estate for a potential guide to lower-frequency direct performance indexes.