THE LATEST ECONOMIC TRENDS IN CRE | October 2025

October Economic Update

Using the Federal Reserve’s preferred gauge, the Personal Consumption Expenditures (PCE) index, inflation rose from 2.6% to 2.7% in August, which was the most recent increase since May 2025. The data shows that inflation has gradually picked up from Q2 to Q3. There was also a modest year-over-year increase in inflation from August 2024, in which the PCE was 2.4%. Economic uncertainty regarding tariffs may explain rising inflation rates. In response to tariff effects and rising unemployment, the Federal Reserve decided to cut interest rates from 4.5% to 4.25% in mid-September and appears poised to continually lower rates through 2026.

Additionally, the Federal Reserve has been forced to solely use private data sources to mull over interest rate decisions, due to the ongoing federal government shutdown, further complicating an already uncertain economic environment. It’s possible that, as further interest rate cuts ensue, lending conditions will improve and unemployment will decrease due to greater economic stimulation. However, inflation may increase as interest rates lower, so the Fed could hold off on implementing more cuts should PCE numbers rise too quickly. Indeed, the Federal Reserve aims to approximate its 2% inflation target while monitoring other macroeconomic fundamentals.

Our Take

Despite economic uncertainty on a macroeconomic level, players in the Columbus commercial real estate market are well-positioned to capitalize on looser lending conditions as interest rates lower and inflation remains relatively stable. Already momentous Columbus sectors like industrial real estate should continue to see growth as developers look to expand inventory. Mixed-use developments that feature office, retail and multifamily space could also see accelerated construction.

Furthermore, as new firms such as Anduril enter the Columbus market, economic stimulation will follow through greater job creation. Overall, the Columbus commercial real estate market shows strong signs of economic resiliency across all sectors as the region grows and attracts high-performing, innovative market players.