Location Strategy Chartbook 06.13.2026

Goldman Sachs Research doesn’t expect the Federal Reserve to lower rates until next year. David Mericle, chief US economist, has pushed his forecast for the final two rate cuts for this cycle to June and December 2027 (from December 2026 and March 2027 previously).

US economic activity and labor market data “have been stronger than we anticipated in recent months, with job growth in particular picking up impressively,” Mericle writes.

Mericle’s team still anticipates that GDP growth will be somewhat below potential in the second half of this year as high oil prices weigh on spending. But our economists now expect the unemployment rate to rise only a touch further this year to 4.4%, down from a previous forecast of 4.6%.

The combined effects of tariffs, higher oil prices and other effects of the war in the Middle East, and artificial intelligence (AI) demand are expected to keep year-over-year core personal consumption expenditures inflation steady at above 3% throughout 2026. But fundamental drivers of inflation look softer. “As a result, we continue to expect inflation to fall to close to 2% in 2027, barring additional supply shocks,” Mericle writes.

U.S. companies’ costs to provide goods and services increased at an annual rate of 6.5% in May, spurred largely by a spike in energy costs tied to Middle East tensions, the Labor Department reported Thursday. It was the highest annual jump in producer prices since November 2022, when costs rose 7.4%.

Also known as wholesale prices, producer prices often affect consumer prices, which rose in May at an annual rate of 4.2%, the highest in three years. The annual rate of producer inflation has now risen for four straight months.

Construction project developers and contractors have been hit especially hard by material price increases during the past four years, caused by supply chain disruptions, trade tariffs and most recently the war in Iran. Government data showed prices for diesel fuel, used in trucks and construction equipment, were up 19.9% from April and more than doubled from May 2025 with a spike of 105.9%.

The Associated General Contractors of America trade group noted May’s overall costs for nonresidential construction rose 1.8% from the prior month and soared 8.4% from a year earlier. Prices for some aluminum products increased 48.8% on an annual basis, structural steel parts rose 15.6% and truck transportation costs for materials increased 17.3%.

“Runaway prices for key construction inputs are pushing up costs twice as fast as the 4.2% rise in the consumer price index,” Ken Simonson, the contractor group’s chief economist, said in a Thursday statement. “Contractors are being hit by a double whammy of rising materials prices and much lower increases in what they can charge for new projects.”

Exports of refined fuels from other nations along the Persian Gulf have rebounded this month as more tankers manage to slip through the Strait or Hormuz. Shipments from countries including Saudi Arabia, the United Arab Emirates and Kuwait averaged more than 600,000 barrels a day so far this month, according to data from research firm Vortexa.

That’s an increase of about 50% in exports of crucial oil products such as diesel, gasoline and naphtha, compared with April and May. However, it’s still just a fraction of the roughly 4 million barrels a day of fuels those countries were shipping prior to the war.

Goldman Sachs: Oil prices are likely to stay elevated for some time in the wake of significant declines in global oil inventories, according to Ephraim Sutherland in the Wealth Management Investment Strategy Group.

To explain why, Sutherland looks at global observable oil inventories over the past few years. At the beginning of 2026, levels were at a multi-year high, driven by increased production and slower demand. This provided a buffer when the Iran conflict began and oil supply through the Strait of Hormuz was disrupted. Now, as of June, inventories have dropped significantly, with refined products like jet fuel and diesel hit particularly hard.

Blackstone Real Estate Debt Strategies has committed more than half a billion dollars to the industrial outdoor storage sector in the span of a week.

Blackstone's lending arm, known as BREDS, originated a $244 million loan for Philadelphia-based Alterra IOS and participated in a $281 million financing package for New York-based Catalyst Investment Partners. Together, the two financings are backed by 114 properties across dozens of U.S. markets.

The back-to-back deals illustrate how quickly institutional capital is moving into industrial outdoor storage, a historically fragmented asset class defined by paved or gravel yards used for truck parking, equipment storage and container staging near urban cores.

The Alterra loan alone marks BREDS' sixth IOS transaction, bringing its total lending exposure to the sector to more than $1.1 billion.

Alterra IOS, which has acquired more than 470 sites in 39 states, secured its $244 million loan against 37 properties spanning 27 markets. Those assets include 165 usable acres and 806,000 square feet of warehouse space, concentrated in major logistics corridors across Florida, Georgia, Indiana, Maryland, North Carolina and Virginia. The financing includes future funding for additional acquisitions.

The deal introduces a newer financing structure. Rather than using a traditional mortgage, Alterra and Blackstone implemented an equity pledge framework — a model Alterra's Chief Financial Officer Scott Whittle described as "a meaningful evolution in the financing of institutionally owned IOS assets on a non-recourse basis."

Catalyst Investment Partners, meanwhile, secured $281 million in separate financings from BREDS and institutional investors advised by J.P. Morgan Asset Management. The J.P. Morgan component marks its first loan secured entirely by a dedicated IOS portfolio.

The Catalyst financing is backed by 77 properties across 12 high-barrier-to-entry markets, including Northern New Jersey, Miami and Washington, D.C. Tenants range from equipment rental firms to e-commerce companies.

Alterra has raised more than $1.8 billion in institutional financing across its discretionary ventures and $1.45 billion in equity for its closed-end funds. Catalyst closed its third IOS-dedicated fund in February at $400 million and manages a portfolio on pace to reach 250 sites by 2027, with assets under management exceeding $1 billion.

Salt Lake City’s retail property sector is generally balanced as the middle of 2026 approaches. However, despite relatively tight market conditions, with an overall availability rate below 5%, rent growth has slowed.

As of the second quarter of 2026, trailing 12-month move-outs from retail space totaled just over 1.4 million square feet, about 11% below the historical average. Quarterly move-outs have remained below 400,000 square feet for three consecutive quarters and may reach a fourth based on early data for the second quarter.

Salt Lake City’s availability rate has ticked higher over the past 12 months to 4.4%, but still remains 40 basis points below the national rate of 4.8%.

Retail rents, however, have lost momentum. Year-over-year growth peaked at 7.2% in late 2022 and has since eroded. From 2022 to 2024, Salt Lake City ranked among the top-performing retail property markets nationwide for rent growth.

As of the second quarter of 2026, asking retail rents rose approximately 0.4% over the most recent 12-month period, compared to the national average of 1.9%. Salt Lake City's average market asking rent is near the all-time high of $26.20 per square foot, but weaker rent increases could be in play for the next few quarters.

Bahrain-based Ajyad Capital and SITG Capital acquired Siena on Westheimer, a 643-unit multifamily property in Houston, from Blue Roc Premier and Stonecutter Capital Management for $39 million, or $66,653 per unit.

The joint venture acquisition, structured through Ajyad's Sharia-compliant dedicated investment vehicles, marks the firm's entry into the Houston market and adds to a wave of institutional and cross-border capital flowing back into Houston multifamily, according to CoStar data.

Built in 1972 at 6263 Westheimer Road, the three-story property offers a mix of one-, two- and three-bedroom units. The complex carried a 5% vacancy rate at the time of sale, with 32 units unoccupied, per CoStar information.

The deal arrives as institutional investors have re-emerged as a major force in Houston's apartment investment market. Institutional investors represented nearly 40% of buyer activity over the past 12 months ending in April, up from 25% in 2023 to 2024, and above the 35% share typical between 2015 and 2019, according to CoStar data.

Among homeowners surveyed, the dominant reason for staying put remains simple: their current home still works for their lifestyle and needs.
However, it is clear that affordability pressures continue to shape mobility decisions. Roughly 20% of respondents cited either elevated mortgage rates or high home prices as the biggest reason they aren’t moving right now. Moreover, roughly 10% of surveyed homeowners say their mortgage rate is too low to give up.

A third of homeowners surveyed said they would be somewhat more likely (23%) or much more likely (10%) to buy a home if mortgage rates fell below 6.0%, underscoring how psychologically significant that threshold remains for many Americans.

Homeowners remain cautious on home prices over the next year, though the outright bearishness seen in late 2025 has eased somewhat.

• In Q1 2025, nearly 30% of homeowners surveyed expected local home prices to rise by at least 4% over the next 12 months. By Q3 2025, that share had collapsed to just 13%—in Q2 2026 that figure was 14%.

• In Q1 2025, just 24% of homeowners expected home prices to either stay flat or decline over the next 12 months. That figure surged to 55% in Q3 2025, then eased slightly to 44% in Q2 2026.

• Still, homeowners aren’t expecting a home price crash. Only 14% of respondents in Q2 2026 expect prices in their local market to decline by -4% or more over the next year.

  

In Q1 2025, only 41% of homeowners surveyed said they would accept a mortgage rate up to 6.0% on their next home purchase. That share climbed to 52% in Q3 2025, then eased slightly to 47% in Q2 2026.

• The broader trend still suggests that many Americans are VERY SLOWLY coming to terms with the reality that their next mortgage rate will likely be materially higher than the one attached to their current home.

• Acceptance of rates up to 5.5% also remains significantly above early-2025 levels. In Q1 2025, 54% of homeowners said they’d accept a rate up to 5.5%, compared to 63% in Q2 2026.

• At the higher end of the spectrum, tolerance for very elevated rates continues to fade. In Q2 2026, no respondents said they would accept a mortgage rate of 7.5% or higher on their next purchase, down from roughly 7% in Q1 2025.