Location Strategy Chartbook 04.25.2026

Prices on our screens might be making us complacent about a looming economic drag. The Iran conflict’s effects will get a lot uglier.
 
But the hit to global supplies of oil, gas, fertilizer, helium, aluminum and other commodities from the Strait of Hormuz blockade is the sort of thing the market, and most Wall Street professionals, are bad at processing.

“I’ve been surprised by how the (stock) market is willing to look through the fact that the strait continues to remain shut,” said Josh Martin, head of securities and equity capital markets at Pickering Energy Partners, on a company podcast.
 
Americans are concerned about pump prices but, with no physical shortages, a billion missing barrels seems as abstract as 10,000 pneumonia cases in far-off Wuhan. Even with a deal, stories will soon start to roll in about travel disruptions and factory shutdowns in Asia and then in Europe.
 
In the best case, it could take six months for markets like jet fuel and petrochemicals to normalize. Agriculture will feel the pinch for longer, and liquefied-natural gas will be crimped for years because of damaged infrastructure in major producer Qatar.
 
The damage is cumulative, though. One reason energy-futures don’t fully reflect this is that any glimmer of hope blows up bullish derivatives positions. Two of the largest per-barrel drops in crude futures ever have occurred in recent weeks.
 
A wave of pain is headed for major economies under the rosiest scenario. Even if it’s worse in Asia and Europe, it will be felt on the bottom lines of American companies that rely on their customers and their factories.

US consumer sentiment fell in April to a record low, in data that goes back to 1978, reflecting deepening worries around the economic fallout from the US-Israel war with Iran, including spiking gasoline prices, as well as inflation and affordability concerns.

The number of Americans submitting new state unemployment filings hit 214,000 last week, up a modest 6,000 from the week before. That’s according to advanced seasonally adjusted figures from the U.S. Department of Labor.

February's construction jobs rose year over year, but a bleaker monthly picture could signal slowing building patterns.

Thirty U.S. states and Washington, D.C., gained construction jobs between February 2025 and February 2026, according to the Associated General Contractors of America’s analysis of data from the Bureau of Labor Statistics. Two states saw flat annual construction jobs and 18 saw contractions, with Texas adding the most jobs at 24,000, or 2.7%, and California losing the greatest number at 10,300 positions for a 1.2% decline.

But only 22 states saw monthly construction job growth between January and February, AGC found, with 27 states and D.C. seeing employment dip. South Dakota’s construction employment was unchanged. Florida added the most jobs between January and February with 1,100 positions, or a 0.2% increase, and New Jersey reported the biggest decrease, down 3.5%, or 5,900, of its construction jobs.

“Severe winter weather in late January and February probably led to a drop in the number of states with one-month job gains,” said Ken Simonson, chief economist for the Arlington, Virginia-based trade group. “But construction is slowing in many parts of the country, apart from areas with data center, power, and large manufacturing projects, as other owners hold back on starting projects.”

US retail sales soared in March by the most in a year, suggesting consumers continued to spend on a wide array of merchandise despite a surge in gasoline prices sparked by the Iran war.

The value of overall retail purchases increased 1.7% following a revised 0.7% gain in February, according to a Commerce Department report published Tuesday. The data are not adjusted for inflation.

While the March increase was led by a record jump in spending on gas, nearly every category in the report — from furniture to electronics to general merchandise — posted increases.

The report suggests consumer spending remained solid last month even as prices at the pump rose. That strength likely reflects larger-than-usual tax refunds flowing into households’ bank accounts in recent weeks. As a result, forecasters may boost estimates for first-quarter gross domestic product, which the Bureau of Economic Analysis will publish on April 30.

Still, economists caution the boost may prove temporary as tax season winds down, fuel costs remain elevated and hiring stays subdued.

Retail rents grew at their slowest pace in the first quarter since 2014, reflecting a market gradually returning to equilibrium after several years of outsized gains.

At the national level, asking rents for retail space increased by a modest 1.9% over the past year, extending a moderating trend that began in 2023 as the pace of rent growth continued to cool. This is the first time year-over-year growth fell below 2.0% since the first quarter of 2014, when it was just 1.8% as the market was still recovering from the Great Recession.

While supply and demand fundamentals in the retail sector remain balanced, a slight uptick in vacancy, alongside moderating tenant sales growth, has reduced landlords’ ability to push rents at the aggressive pace seen immediately after the pandemic.

U.S. industrial production fell by 0.5% in March, the first contraction in the metric since November of last year, according to a recent Federal Reserve report.

While all industrial groups saw slower activity, the manufacturing sector experienced the smallest contraction of 0.1%, after robust gains in the first two months of the year.

However, within that muted backdrop, computer and electronic product manufacturing remains a clear outlier. Production activity in this segment, led by semiconductors and related electronic components, has outperformed the broader manufacturing index, supported by sustained demand tied to data centers, advanced manufacturing, artificial intelligence and automation.

Oracle’s $300 billion megadeal with OpenAI is testing the limits of Wall Street’s appetite for debt tied to America’s data-center boom. Banks including JPMorgan Chase struggled for months to spread the risk of billions of dollars in loans they made to build data centers leased to Oracle in Texas and Wisconsin. The challenges highlight a risk for the multitrillion-dollar data center boom, where limited access to capital compounds obstacles caused by a strained electric grid and a growing public backlash.

April Multifamily Update: A Ho-Hum Start to the Leasing Season. If you thought the market would tank due to weak job numbers, you were wrong. And if you expected a strong rebound, you were wrong, too.

Apartment demand has been very solid. Just not enough to put a big dent in vacancy rates elevated by the massive 2023-25 supply wave. Rents did increase in March. Just not as much as we typically see this time of year. And that’s largely because vacancy is still elevated, limiting pricing power.

As expected, supply plunged in Q1 2026, one of the lowest supplied quarters since 2018 with 75k units completing, down 53% from the peak set back in Q3 2024. That’s the first time in four year that quarterly deliveries came in below 80k units. So supply isn’t totally evaporating, but it’s dropped off significantly. And we should see similar numbers through 2026.

That drop is basically universal, extending not just to the Sun Belt but even to lower-supplied markets in the Midwest.

As Cushman & Wakefield recently reported: “Multifamily demand normalized in the first quarter, consistent with typical seasonality and a softer labor market backdrop. Net absorption totaled 65,200 units, down 34% year-over-year. Despite the slowdown, demand was broadly in line with historical first-quarter averages.”

As Radix’s Jay Denton writes, occupancy “displayed minimal growth since the beginning of the year rather than the typical seasonal increase.”

“Renters continue to favor newer, high-quality product. Class A vacancy declined roughly 80 bps over the past year as renters trade up in quality, while Class B and C vacancy increased by a similar magnitude.”

Even absent much job growth in most markets – and all the worries about the impacts of AI, the Iran conflict, low consumer confidence, etc. – we still saw very solid absorption.

Higher mortgage rates, uncertainty from the Iran war and uneven supply are forcing house hunters to sit out what should be the US’s busiest home-selling season.

While brokers have reported some increased activity in recent weeks as mortgage rates have stabilized, the tough start to the season suggests a long-awaited housing rebound is unlikely to materialize.

The few winners are at the high end, where buyers are less sensitive to inflation and affordability constraints—another sign of how the K-shaped economy is deepening even as Trump promises to make homeownership more attainable.

It’s not just the war causing turmoil. The rapid adoption of artificial intelligence has exacerbated anxieties around employment in an already shaky labor market. And surging gas prices are hitting the wallets of people looking for homes in affordable car-centric areas.

Demand is still strong in markets where wealth is concentrated and cash buyers are unfazed by higher borrowing costs. But, for people who need to both buy and sell houses, the dynamic is trickier.

Luxury homebuilder Toll Brothers—which has an average selling price of about $1.2 million—announced on Tuesday that it has signed an agreement to buy Fayetteville-based Buffington Homes of Arkansas, marking both CEO Karl Mistry’s first big move since taking the helm at Toll Brothers in March and the builder’s entry into the fast-growing Bentonville, Arkansas market.

Founded in 2010, Buffington Homes is the largest luxury homebuilder in northwest Arkansas and currently operates nine active or upcoming communities across the area, according to Toll Brothers. Buffington Homes owns or controls more than 1,500 lots in the northwest Arkansas market, giving Toll Brothers a sizable land pipeline as it expands its national footprint.

The Bentonville, Arkansas housing market is located in one of the nation’s fastest-growing population areas. Between July 2024 and July 2025, the population of Benton County, Arkansas, jumped +3.3%, compared to a +0.5% increase in the U.S. population over the same time frame.