CompStat: Cooling Imports, Mid-Size Office Momentum, Industrial Bifurcation

SKIP AHEAD TO

• Smaller Office Deals Power Manhattan’s Leasing Momentum
• Oversupply Drives Industrial Market Bifurcation as Investors Favor Building Quality Over High-Volume Construction Markets
• Discount Grocers Lock In Longer Leases at 36% Lower Rents as Store Traffic Surges

Economic Updates

Tariffs and Trade:

• Year-to-date goods imports remain up 5.6% through November due to earlier front-loading ahead of 2025 tariffs, but momentum has clearly softened with November as the fourth straight month of year-over-year declines in goods volumes. 
• Major ports also pulled back, with Los Angeles down 11.5% year over year and similar declines at Long Beach and Savannah, signaling a broader slowdown in shipping activity.

Labor Market Conditions:

• The labor market remains stable but is showing early signs of cooling. Initial jobless claims averaged about 211,200 per week in January 2026, down slightly from December and below year-ago levels. However, job openings have declined for two consecutive months, pointing to moderating hiring demand.

Consumer Sentiment:

• Consumer sentiment has improved modestly for three straight months but remains near historic lows. This sentiment measure may finally be reflected in spending: Real retail sales slipped in December, suggesting some softness in holiday spending.
• Meanwhile, inflation appears to be stabilizing, with CPI flat month over month in December and PCE hovering around 2.7%–2.8%.

Federal Reserve Policy:

• The Fed delivered its third rate cut of 2025 in December before pausing in January. With inflation easing, GDP growth strong in Q3, and the labor market still steady, policymakers appear to be taking a wait-and-see approach entering 2026.

Smaller Office Deals Power Manhattan’s Leasing Momentum

Last year’s Manhattan office market rebound wasn’t just about headline-grabbing megadeals; it was propelled by a broad base of smaller and mid-size transactions that quietly drove activity. According to Colliers data in a recent Commercial Observer article, leases under 25,000 square feet accounted for roughly 78% of deal counts in Q4 2025, with mid-tier (25,000–99,000 square feet) making up another 18%. Together, deals under 100,000 square feet comprised about 70% of total leasing volume.

CompStak data shows similar momentum. Since 2019, starting rents for 25,000–99,999 square foot leases have grown at a 3.0% CAGR, outpacing both sub-25,000 square foot deals (1.1%) and transactions of 100,000 square feet or larger (1.5%). Although starting rents for sub-25,000 square foot leases dipped slightly year over year in 2025, this segment posted consistent annual gains over the prior five years, while 100,000+ square foot deals showed more volatility over that period. From 2024 to 2025, the average starting rent for new Manhattan leases of 100,000 square feet and larger declined by approximately 9.0%. By submarket, Grand Central captured the largest share of both smaller (5,000–24,999 square feet) and mid-size lease counts from 2019 to 2025, while Hudson Yards led in 100,000+ square foot transactions, underscoring how different submarkets continue to attract distinct tenant profiles across Manhattan.

Oversupply Drives Industrial Market Bifurcation as Investors Favor Building Quality Over High-Volume Construction Markets

Industrial sales surged to $68 billion through November 2025 as cap rates climbed to 7.33% and vacancy reached multi-year highs, with Class A properties trading at yields between 4.5% and 6.5% while secondary assets commanded 7% to 8%, according to a GlobeSt article. This pronounced bifurcation is being driven by supply dynamics and asset quality across major markets, which is also borne out by CompStak data. Of the major industrial markets tracked by CompStak, markets with the highest volume of recently delivered and under construction space, including Dallas-Fort Worth (51.0 million SF) and Houston (37.1 million SF), both high- and low-construction markets saw year-over-year sales price growth in 2025, with lower-construction markets posting slightly stronger gains. 

While cap rates expanded across both cohorts, they widened more in lower-construction-volume markets than in higher-supply metros, according to Cushman & Wakefield construction pipeline totals and CompStak sales data. Investors’ preference for modern, high-quality logistics assets was also evident: Class A properties built in 2010 or later achieved the highest average sales price per square foot in 2025 at $230.70/SF, the lowest cap rates at 5.96%, and the smallest year-over-year cap rate expansion. The data underscores that quality assets in supply-constrained markets continue to attract capital at competitive terms, while more commoditized industrial product in oversupplied metros faces greater pricing pressure as fundamentals normalize.

Discount Grocers Lock In Longer Leases at 36% Lower Rents as Store Traffic Surges

Aldi’s aggressive expansion, with 180 new U.S. stores in 2026, underscores the growing opportunity for low-cost, efficient, value-oriented grocery formats and reflects strong consumer demand for consistent everyday pricing, according to a CNBC article. The 2026 Grocery Shopper Perspectives survey by AlixPartners shows that discount stores (+5% year over year visits) and club stores (+2%) are gaining traffic, while traditional grocery stores (–4%) and big-box retailers (–5%) are losing visits, highlighting a clear shift toward everyday low pricing (EDLP) and value-focused shopping. Aldi was included in the discount stores category, while Costco’s and Sam’s Club represented the club stores, ones like Kroker and Albertsons represented traditional grocery stores, and stores like Walmart and Target represented the big box retail category.

CompStak’s data on grocery anchors revealed that discount stores, with lower average rents ($10.22 per sq. ft.) and longer lease terms (180 months), are structurally positioned to offer greater value compared with club stores ($17.53, 60 months), traditional grocers ($16.02, 130.5 months), and big-box retailers ($15.16, 164.2 months). Consumers are increasingly comparing prices across channels before shopping, favoring private brands, and adopting more disciplined behaviors, such as meal planning and resisting impulse purchases.