Stream’s 2025 Central Region State of the Market event brought together some of the nation’s top industry leaders for a dynamic panel discussion on the evolving commercial real estate (CRE) landscape. Featured speakers included Scott Brown, Managing Director and Global Head of PRIME at Morgan Stanley; Dr. Ray Perryman, President & CEO of The Perryman Group; Trey Price, Co-Founder of Guidepost Energy; and Shiva Viswanathan, Senior Managing Director at Northwood Investors. The panel explored pressing topics such as economic uncertainty, emerging market opportunities, and investment strategy—united by a shared goal of unlocking potential and shaping the industry’s future.
Here are the key takeaways from the discussion:
1. Tariffs
Panelists discussed the growing economic impact of tariffs, warning of widespread disruption.
“Tariffs are just taxes,” Perryman said. “If you buy something overseas and it’s subject to a tariff, you pay for it. While reshoring has potential, only about 13% of manufacturing can realistically return, so tariffs won’t deliver the economic boost some expect.”
Brown and Viswanathan agreed that although interest in the U.S. market remains, rising uncertainty is prompting investors to slow down. Momentum had been building, but economic and geopolitical concerns are driving a more cautious, wait-and-see approach.
Price emphasized overlooked parts of the power grid, noting that beyond turbines, critical components like substations, reclosers, and switchgear are in global short supply. With 36% of high-voltage switchgear made in Mexico, new tariffs could worsen supply issues. Inflation and demand have already driven up costs, and “we’re just piling more pressure on top of an already strained system,” he said.
2. Reshoring
Reshoring has long been discussed, but proposed tariffs are bringing renewed attention to the idea. Some companies had already begun reshoring due to poor overseas productivity, but the pandemic accelerated the shift. Supply chain disruptions exposed the risks of over-reliance on foreign manufacturing, prompting a reassessment of offshoring’s true cost.
Perryman explained, “The pandemic sort of put it on steroids because we realized we needed many things we couldn’t get. That motivated people to look at things differently—maybe it’s worth paying a bit more to produce in Mexico or southern Texas instead of China.”
While tariffs are intended to boost U.S. manufacturing, Perryman warned they shouldn’t be a permanent solution: “The costs are too great, and their uncertainty offsets much of the intended benefit.”
Brown noted that investors are reallocating from coastal to central markets. “Texas offers a strong business climate and family-friendly environment,” he said. “Investors want to get ahead of the manufacturing trend, which favors many Texas markets—and select areas of Chicago. This shift should be a net positive for the region.”
3. Inflation
With inflation and interest rates expected to stay elevated, Viswanathan offered an optimistic outlook for real estate:
“Real estate is a good place to invest during inflation—if you pick the right spots,” he said. “New construction is limited, partly due to inflation and tariffs. So, if you’re in a market with growing demand and natural tailwinds, you’re in a strong position.”
He pointed to migration to the Sun Belt and the rise of nearshoring and reshoring as key drivers: “Migration to the Sun Belt isn’t slowing—creating housing demand. Nearshoring and reshoring are boosting industrial demand. Even with inflation and high rates, growing markets should see income gains.”
Brown offered broader context on the economic climate, noting that while inflation concerns eased slightly last year, tariffs are keeping prices high—likely delaying Fed action and fueling uncertainty that complicates investment decisions.
“It makes underwriting tougher,” he said. “There’s a lot of noise around forecasting growth, demand, and cap rates. Predicting pricing two or three years out is difficult.”
Still, Brown pointed to resilient fundamentals: “Supply is in check, and fundamentals aren’t bad. But it’s a harder environment to underwrite with confidence.”
4. Government Cuts
The question remains: will the Department of Government Efficiency (DOGE) continue to shape the economy—and if so, to what effect?
Perryman recalled the Clinton Administration’s careful streamlining, which cut 400,000 jobs department by department. “It was done thoughtfully, asking: what do we need, what do we not need?” he said. “That scalpel approach was effective. What we see today feels more like a blunt instrument, with some agencies reversing cuts they didn’t fully consider.”
While acknowledging inefficiencies, Perryman warned that improvements shouldn’t come through broad disruption. Shuttering offices or canceling contracts could harm local economies and real estate markets.
His larger concern is the paralysis uncertainty creates. “The most common response is to do nothing,” he said. “And economies are built on people doing something.”
Panelists agreed that adaptation speed and clear policy communication will shape the outcome. The path forward may be slower—but those ready to act with purpose will find opportunity.
5. What’s Next for CRE
The outlook for commercial real estate—especially office—is shifting. Despite bleak headlines, many investors see a more nuanced and opportunistic landscape.
Viswanathan noted that financing is returning, with New York leading the rebound. “Spreads are tightening, and more capital is available—that’s positive for office investments,” he said.
This has sparked cautious optimism. Perryman noted that while many investors had paused due to uncertainty, public market volatility is renewing interest in real estate—especially in Texas and Chicago, which remain top locations for corporate expansion thanks to strong infrastructure, diverse economies, and competitive costs.
“Texas has won the Governor’s Cup 14 times in 30 years, and Chicago has topped city rankings for 12 straight years,” he said. “Texas offers low power costs and a business-friendly climate, while suburbs like Elgin, Illinois, are growing fast.”
Price pointed to energy costs as a key driver for industrial users. “Texas with ERCOT, and Chicago’s place in the PJM electric grid, offers cost control through long-term energy contracts—a major advantage over regulated markets,” he said.
One thing is clear: adaptable markets and assets are leading the way. “Momentum doesn’t disappear—it just shifts,” Brown said. “And right now, it’s shifting toward regions and strategies built for what’s next.”
A Fireside Chat
Marcus Luttrell, Navy Cross, and Purple Heart recipient, closed the panel with powerful insights on leadership in times of uncertainty. Drawing from his personal experiences, he urged leaders to keep moving forward, reminding them that immense potential awaits on the other side of challenges. Luttrell highlighted that resilience, adaptability, and perseverance are essential to navigating challenging times. His message struck a chord with the audience, reinforcing the fact that, just as in leadership, overcoming market challenges brings extraordinary rewards for those who confidently press on.
Our Central State of the Market panel discussion was expertly moderated by Patrick Russo, Executive Managing Director & Partner at Stream’s Chicago office. Managing Director of Texas Office Services, Doug Jones, led our engaging Fireside Chat.
Special thanks to our sponsors:
Munsch Hardt Kopf & Harr, P.C., SITE Technologies, Austin Industries, Clean Scapes, Metropolis Technologies, KPRS Construction Services, Inc., Kimley-Horn, CoStar Group, PJS of Texas, Scout Security Group, Titan Security Group, and RealtyAds
About Stream Realty Partners
Stream Realty Partners is a national commercial real estate firm offering an integrated platform of leasing, investment and development services. This includes tenant and landlord representation, Legendary CX property management, capital markets, investment management and sales, construction, construction management, national program management, workplace strategies, strategic marketing, and dedicated research. The company is headquartered in Dallas with operations in core markets coast to coast. Since 1996, Stream has grown to more than 1,400 professionals and now completes annual transactions valued at more than $8.8 billion in office, industrial, retail, healthcare, land, and data center properties. For information, visit www.streamrealty.com and follow Stream on LinkedIn, Instagram, X and Facebook.
