CompStat: Impact of Tariffs on Retail, Amazon’s Expansion, and DOGE Portfolio Insights in Philly and D.C

SKIP AHEAD TO

• DOGE Targets Government Leases: CompStak Portfolio Comparison Highlights Market Disparities
• Amazon Seeking Partner For $15 Billion Expansion, Signaling Long-Term Domestic Strategy
• Apparel’s Tariff Exposure May Put Downward Pressure on Downtown Retail Rents

Economic News Updates

CompStak is tracking several key economic sets to understand:

The impact of  tariffs:

• The retail inventories to sales ratio remained at 1.3 in February, indicating retailers have enough merchandise on hand for 1.3 months. February marked the 11th consecutive month that the ratio read at or above 1.3; future months could show a jump as retailers stockpiled to avoid future tariffs;
• While the Port of Long Beach was the nation’s busiest in March and saw a 25% increase in total TEUs handled over March 2024, the Port of Savannah achieved record-breaking growth, handling nearly 534,000 TEUs, 22.5% up from a year ago; moving forward the West Coast ports are anticipated to show a decline amid tariff pressure on goods originating from Asia.
• Warehouse capacity reversed a downward trend in March, rising by 1.8 points to 52.3. This reading is 7.7 points higher than one year ago. Warehouse utilization declined for the second straight month in March, falling 5.8 points from February. Future readings may be more volatile as the industry adjusts to the short- and long-term impacts of shifting tariff policies;
• Revised estimates of U.S. retail and food service sales for March were up 1.4% month over month and 2.4% higher compared to a year prior. The increase was driven in part by motor vehicles and parts sales, which were up 8.8% year over year; this jump could be a reaction to getting ahead of tariffs to purchase goods, future readings could show a decline or more muted performance.

State of the economy and recession risk:

• Recession risk rose slightly in February, according to the Smoothed U.S. Recession Probabilities Index, with the probability increasing to 0.38% from 0.26% in January. Despite the uptick, the reading remains far below typical warning thresholds—well under 20%—and continues to indicate ongoing economic expansion. Historically, probabilities above 80% have reliably signaled an active recession.
• Office-using job openings rose 3.7% in February but were down 10.3% year-over-year, while other private sector openings fell 5.2% monthly and 11.8% annually. Unemployment edged up 0.4% in February and 9% from a year ago. Despite stock market turbulence and tariff concerns, the job market remains relatively resilient so far

Ongoing concerns about inflation and consumer confidence:

• The PCE index was up 2.5% compared to a year ago in February, on par with the previous month’s readings, according to estimates by the Bureau of Economic Analysis. The index has decreased 470 basis points since reaching a high of 7.2% in June 2022;
• Producer Price Index for construction materials was down 5.2% in March from their most recent peak in May 2022, but is still up thus far in 2025 by 3.1% above December 2024 levels; future readings could show upticks based on tariffs on steel and other significant inputs to construction;
• Producer Price Index for auto manufacturing was flat in March, remaining at a reading of 112.4, even as tariffs announced earlier this year begin to take hold;
• The Consumer Price Index (CPI) for all items declined to 2.4% in March, 40 basis points lower than February. Core CPI, which excludes food and fuel, also declined by 30 basis points to 2.8%. Food alone rose 40 basis points to 3% year over year; 
• The Consumer Sentiment Index fell in April for the fourth consecutive month, dropping 11% from the previous month; The index is down 30% since December 2024 amid persistent worries over trade wars and the broad state of the economy.

Check out more economic updates below.

DOGE Lease Cancellations: CompStak Portfolio Comparison Reveals Differences Between Targeted and Non-Targeted Properties

The Department of Government Efficiency (DOGE) began announcing lease cancellations in early March, putting hundreds of government leases on the chopping block with other government-owned properties reportedly being prepped for potential sale. In addition, the  General Services Administration (GSA)  is planning to vacate its own headquarters at 1800 F St. NW as part of the recent changes.  Among the leases supposedly getting axed are a significant portion of the federal government’s Washington D.C. office footprint, as well as a dozen leases in Delaware, part of CompStak’s Philadelphia market. CompStak’s portfolio feature can be used to compare leases within properties targeted by DOGE with the rest of the market. According to CompStak data, the Philadelphia portfolio of properties in DOGE’s crosshairs is currently achieving in-place rents — those being paid today by active, unexpired tenants — that are 7.7% lower than the rest of the Philadelphia–Central PA–Delaware–Southern New Jersey office market, with a weighted average lease term (WALT) that is 43.1% shorter. The average transaction size for current leases in these properties is 29.8% smaller than the market average of 16,808 square feet and typically involves space in older Class A buildings. Meanwhile, the portfolio of properties in the Washington, D.C. market containing leases that DOGE seeks to cancel is currently yielding an average of $52.82 per square foot in rent paid by active tenants, compared to the broader Washington, D.C. office market average of $47.77 per square foot, according to CompStak data. Office leases in these properties also have 31.6% shorter WALT compared to the market and are for spaces that are on average 36,786 square feet, 83.9%  larger than the market average, per CompStak data. The average built year of those DOGE portfolio buildings is roughly the same as the market average built year.

More recently, for 2024’s leases completed, DOGE-targeted properties in the Philadelphia market typically had an average adjusted starting rent that was 25.8% lower than the market average of $30.27 per square foot, as well as lease terms that were on average 22.8% shorter than the rest of the market. Additionally, the average transaction size in those buildings was 5,657 square feet, 55.4% smaller than the Philadelphia market average of 12,690 square feet and offered on average less free rent, 2 months compared to 5.5 months for Philadelphia. In the nation’s capital, DOGE properties pulled higher rents for longer lease terms in spaces that were considerably larger than the average in Washington D.C. DOGE portfolio property lease starting rents average $51.50 per square foot, 15% higher than the D.C. market. Lease terms averaged 88.2 months in those properties, while the remainder of the market averaged 75.7 months. Average transaction size in the DOGE buildings was 50,933 square feet, 285.7% larger than the market average of 13,206 square feet. The impact of DOGE’s lease cancellations will likely be more disruptive in Washington, D.C., where the properties in which there are DOGE-targeted leases have a higher average transaction size, higher in-place rent, and longer lease terms than the market average. In contrast, the affected Philadelphia properties have leases in place that are smaller, lower-rent, and shorter-term, suggesting a less significant market-wide impact there.

Amazon Seeking Partner For $15 Billion Industrial Expansion, Signaling Long-Term Domestic Strategy
 In the face of shifting trade policy and logistics demands, e-commerce giant Amazon is overhauling its operations to optimize cost and efficiency. The company has put out a call for capital partners to join it in a potential $15 billion plan for nearly 80 new logistics facilities to be built in key U.S. cities and rural areas, according to Bloomberg. Most of the facilities would serve as delivery hubs for vans and trucks, while others would be multi-story fulfillment centers with some of the sites directly funded by Amazon and leased for between 15 and 25 years, which according to CompStak data, is 44% to 200% longer than Amazon leases signed recently in gateway markets. Among gateway markets, Amazon leases signed between Q1 2024 and Q1 2025 were longest in the Phoenix industrial market, averaging 125 months, or 10.4 years (boosted by an 125-month deal signed for 1.2 million square feet at Prologis’ 303 Business Park in Goodyear, AZ ), followed by Atlanta (120 months), and LA-OC-IE markets (92.3 months), according to CompStak data. Overall, across these major markets, the average lease term in 2024 remained below pre-COVID levels but has trended upward for two consecutive years, from 97.5 months for 2023 transactions to 105.4 months for deals signed in 2025 to date.

Apparel’s Tariff Exposure May Put Downward Pressure on Downtown Retail Rents

There’s growing uncertainty around how severely tariffs will impact the retail sector. While retail availability rates remain historically low, according to CBRE, offering some protection against tariffs’ negative impacts, optimism has recently declined. Luxury fashion and apparel in general are particularly exposed, with most goods sourced from countries like China, Vietnam, and Bangladesh. China, now facing the steepest tariffs, poses the biggest risk. According to Vogue Business, analysts now expect global luxury sales could decline by up to 2%, reversing earlier growth forecasts. Overall, the majority of purchases by values of clothing and general merchandise are not purchased online, which makes tariffs a potential headwind for the brick and mortar retail sector.  According to the Monthly Retail Trade Survey from the U.S. Census Bureau, 85% of clothing and general merchandise purchases were made through store or non-store retailers (non-store includes methods like mail-order, vending, direct-response advertising, etc.)  in the most recent data, down from 92% in 2018—the earliest year this level of spending detail was tracked. Overall, clothing and general merchandise sales comprised about 19.1% of all retail sales in 2024, a level that has remained relatively stable since 2018. In addition, Apparel—especially luxury apparel—plays an outsized role in shaping the rent landscape of urban retail corridors. According to CompStak data, the average retail starting rent in U.S. Central Business Districts (CBDs) and other urban areas was $172 per square foot in 2024. Excluding apparel tenants, that figure falls by more than half to just $63, underscoring the significant role these stores play in supporting higher Downtown rents.