Market Talk: Whiplash Markets and the Fragile Pillars of CRE

By: Head of Data Strategy at LightBox, Manus Clancy

We’re living through a market moment where sentiment can shift on a dime—sometimes triggered by nothing more than a tweet or a news chyron. For those of us who’ve been in this business since the “Cheers” era (RIP Norm), it’s hard to recall a time when investor reactions have been this fast, this extreme, and this unpredictable.

In the past, commercial real estate downturns played out gradually. Think back to the recessions of 1990 or 2008–2012. There was pain, but it was slow-moving, giving markets time to adjust. No one was refreshing Twitter (or X) every 30 seconds or parsing every press conference for signs of imminent catastrophe.

A Brief History of Volatility: Then vs. Now

In recent years, market disruptions have increasingly centered around singular events or data points:

2014–2015: Oil fell from more than $100/barrel to less than $30, unsettling even the credit markets.
2022: The outbreak of the Ukraine-Russia war disrupted global energy markets and shocked investor confidence.
2023: Inflation took center stage as CPI crossed 9%, followed by Silicon Valley Bank’s collapse that sent credit spreads soaring.

Each episode fixated on a single issue—whether it would be contained or metastasize into something bigger.

2025: When Everything Moves Everything

Since April 2, we’ve been dealing with a different kind of animal. The size of the initial tariffs introduced that day caught markets off guard. Equities dropped. Fixed income risk premiums soared. Fear spread fast—and just as quickly reversed course after a few tweets hinted at détente.

But tariffs aren’t the only concern. In 2025, markets are reacting to a broader web of pressure points—government spending, stock market swings, Treasury yield spikes. It’s no longer about one dominant narrative. The real story is the complexity itself.

We’ve since lived through waves of market euphoria and panic—not just over tariffs but also the on-again, off-again budget negotiations in Washington. When it looks like spending might actually get reined in, Treasury yields fall. But signs of “business as usual” send them spiking again.

It’s not just the policies—it’s the tempo that’s different. We’re no longer navigating cycles. We’re riding a rollercoaster built on sentiment, speculation, and soundbites.

Why This Matters for CRE

We’ve said for years that a healthy commercial real estate market rests on three pillars:

Low interest rates
Low volatility
A growing U.S. economy

Right now, all three are under threat—from tariffs, deficit spending, and the reactive policymaking that whipsaws the markets.

Even though we may have stepped back from DEFCON 1 on tariffs, we’re nowhere near DEFCON 5. Tariffs are higher than they were six months ago, and it’s still unclear who will absorb the impact:

Will businesses eat the costs, compressing margins?
Will consumers pay more, driving inflation higher?
Will any of this trigger a recession?

And most crucially, will any of it stick—or just vanish with another tweet?

What CRE Professionals Should Watch

In a market driven more by sentiment than fundamentals, here are a few guiding principles for CRE stakeholders:

Reassess your underwriting assumptions. Build in room for volatility in interest rates, cap rates, and exit timelines.
Follow policy signals. Tariffs and deficit spending may have outsized effects on short-term rate moves.
Keep liquidity in mind. Volatile markets tend to punish those who need to transact quickly.

The euphoria of recent market rallies may give way to a more cautious posture in the weeks ahead. But then again—we’re just one tweet (or a surprise budget deal) away from another sharp turn.

So, buckle up. The ride’s not over yet.

Brokers & Investors Lending Commercial Real Estate