The Supreme Court Tariffs Ruling and Commercial Real Estate Investment

commercialobserver.com · Feb 27, 2026 · Collected from GDELT

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In the run of news headlines that have already seemed to define 2026, the Supreme Court’s 6-3 decision on U.S. trade announced Friday morning, Feb. 20., might be viewed as one of the more substantial ones. In a somewhat surprising move, considering its clear conservative tilt, the high court ruled that President Donald Trump’s reciprocal global tariffs, which had been in place since April 2025 and rippled across the global economy, were, in fact, unconstitutional. Stocks rose slightly following the decision — the Dow Jones Industrial Index hung around 49,000 points for much of February regardless, while the S&P 500 stayed strong at 6,900 — and bond yields held steady, with the 10-Year Treasury barely off its 4 percent metric in the days that followed. Meanwhile, commercial real estate capital markets received the news with a mixture of relief and bewilderment, as the ruling served as yet another economic curveball for owners, operators and investors to grapple with. “On one hand it provides some clarity as to the administration’s ability to single-handedly implement tariffs. On the other hand, being very frank, it seemed things had finally settled down, and corporate decision-makers had a position they could somewhat rely on,” explained Aasif Bade, founder and CEO of industrial real estate developer Ambrose, of the months prior to the ruling. “So it did create a new uncertainty from that standpoint of ‘Where does this go and how will President Trump react?’” he added. Trump, not surprisingly, reacted immediately, seemingly defying the Supreme Court’s ruling by playing fast and loose with what he can and can’t legally do as the country’s chief executive when it comes to import duties. The court’s ruling applied to the International Emergency Economic Powers Act of 1977, or IEEPA, which Trump had used as the legal basis for his initial round of global tariffs. However, the ruling did not consider other, older tariff laws, leaving Trump the wiggle room he needed to announce a blanket 15 percent tariff on all imports just hours after the decision. The Supreme Court’s ruling does not cover tariffs enacted under the national security concerns clause of Section 232 of the Trade Expansion Act of 1962 and Section 301 in the Trade Act of 1974. Trump used those laws as the rationale for 10 percent tariffs (with some countries expected to face 15 percent) on all imports for 150 days from just hours after the court ruling. He also used them earlier for higher import duties on steel, semiconductors, aluminum and other products from certain countries. “Is this the one that will stick — 15 percent across the board?” asked Glen Kunofsky, founder and CEO of Surmount, a CRE investment firm. “Most likely it will probably change, but a lot of people in CRE world budget projects according to what [the tariff level is] at the time and can’t worry about the policy until it’s permanent.” David Bitner, executive managing director of global research at Newmark, said that while he welcomed the court’s decision as an act of good jurisprudence, he is skeptical the ruling will do much to change the status quo of the global economy, mainly because the 15 percent tariffs will last for at least five months before they head to a Republican-controlled Congress for renewal. He added that many of the other tariffs on steel and other commodities will serve as bargaining chips for renegotiated trade deals with other countries — keeping duties high for likely the rest of Trump’s final term in office. “It was the appropriate decision in response to what seemed like a clear overreach by the executive … but, particularly speaking, does it matter for capital markets, leasing markets, and the U.S. economy? No, not really,” said Bitner. Others, like Sam Chandan, director of the Chao-Hon Chen Institute for Global Real Estate Finance at New York University, noted how the economy grew at only a 1.4 percent clip in the fourth quarter of 2025, making clear how much relief was needed from what he called “unhelpful, tariff-driven inflation costs.” “This ruling removes one of the key concerns relating to inflationary pressure from the supply side of the economy,” Chandan said. “Lower import costs translate into some margin restoration for businesses and purchasing power lift for households, both of which the economy currently needs.” Moreover, some sectors of CRE are likely to be excluded from the worst consequences of Trump’s tariff-hungry appetite. Mark Fitzgerald, head of research at Affinius Capital, told Commercial Observer that we’ve already seen carve-outs in recent trade deals for AI software and equipment, which the Trump administration recognizes is a national security priority, especially for the buildout of data centers. Fitzgerald said we should expect future exemptions for tariffs impacting construction materials used by homebuilders, especially with the U.S. in the midst of an affordability crisis. “From a commercial real estate perspective, I don’t expect we’ll see a significant impact,” Fitzgerald said. “I just don’t think it changes a lot in the real estate sector.” Holiday hangover If CRE experts hold contrasting views on the significance of the Supreme Court’s tariff ruling, it’s probably because the industry is still recovering from the shock of April 2, 2025 — otherwise known as “Liberation Day.” After Trump announced widespread, unilateral tariffs across nearly every U.S. global trading partner last spring, the S&P 500 and Dow Jones Industrial Index each fell more than 10 percent within weeks, while Treasury yields went haywire, rising 50 basis points one week in April and dropping 50 basis points before the month was out. Through it all, commercial real estate found itself placing deals on hold, postponing decisions, and pausing investment activity. President Donald Trump delivers remarks on reciprocal tariffs. PHOTO: BRENDAN SMIALOWSKI/AFP via Getty Images A post-Liberation Day survey of senior real estate executives conducted by the CRE Finance Council (CREFC) found that 80 percent of respondents expected worse economic conditions in the months to follow, with only 7 percent believing economic conditions would improve under higher tariffs. Moreover, CREFC’s sentiment index fell 30.5 percent that quarter alone. “It created tremendous volatility, and I think back on that April and May time period as peak uncertainty,” said James Bohnaker, principal economist at Cushman & Wakefield. “We really saw a ton of volatility around that time, reflecting the regime change from a policy perspective in terms of magnitude and not knowing what’s next.” David Greek, managing partner at Greek Real Estate Partners, said that the Liberation Day tariffs “were higher and much broader than the market had anticipated,” and that additional economic whiplash occurred after Trump added and subtracted tariff rates by fiat, changed targets, leaked rumors of trade deals, and announced trade deals without providing many details. “That was almost as big an impact as Liberation Day itself — the amount of change that occurred over six months,” said Greek. Greek added that capital markets require certainty. The recent Supreme Court ruling in some ways mirrors Trump’s announcements from last spring, he said, as it creates further questions around trade policy and will likely create a wary climate for decisions related to capital expenditures and investments. “The Supreme Court ruling will be a similar outcome to what happened after Liberation Day,” he said. “This just introduces another vector of uncertainty, so now we need to be more cautious on how we’re spending money and making large capital decisions moving forward.” Sentimental education If the past is prologue, then it makes sense to look at whether the market’s temperature check from spring 2025 can tell us anything about how investors might handle spring 2026. When speaking with CRE experts, industrial was selected (by wide consensus) as the main asset class to examine when attempting to grapple with the impact of tariffs. Because of supply chain ramifications, and the fact that a typical industrial warehouse ships consumer and mechanical goods — from both domestic and international suppliers — if those goods are more costly to import, it stands to reason that entire business models will be placed in purgatory. “We don’t know how it will play out given that the tariff policy is still in flux, but suppliers of foreign goods are strategically rethinking what the entire supply chain looks like, so that will have implications for industrial,” said Bohnaker. Bitner said that even as the economy went gangbusters over semiconductor production and data center development in 2025, manufacturing on the whole still lost jobs last year. The Progressive Policy Institute found that U.S. manufacturing lost 108,000 jobs in 2025. “It played into the manufacturing labor weakness we saw throughout the year,” said Bitner. “I’d feel confident in saying that our trade restriction, and the uncertainty attuned to that, was a factor in that weaker employment market.” Ambrose’s Bade listed how most industrial supply chain projects involve large capital investments, usually ones that extend far beyond the physical real estate projects into robotics and mechanical handling equipment. The ongoing high tariff regime has thrown a wrench into C-suites facing down $50 million to $300 million of capital expenditures — making it likely 2026 will see more hesitation among major players across the asset class. An employee of Independent Can Company works on the manufacturing line in Belcamp, Md. PHOTO: RYAN COLLERD/AFP via Getty Images “From our view, somewhere between April 2 and September of 2025, any [industrial] C-suite said, ‘Do we really need to make a final decision on this enormous capital spend right now, or can we wait and gain clarity on how this shakes out?’” said Bade. Even so, Bade and others pointed out that the high tariffs, and requi