U.S. Macro Outlook: Mild Recession ≠ Pleasant

CUSHMAN & WAKEFIELD RESEARCH U.S. Macro Outlook

STRONG UPSIDE SCENARIO*, 10% PROBABILITY

2020

2021

2022

2023

2024

2025

U.S. Economy Real GDP (AR, %)

-2.8% -9,109

5.9%

1.9%

0.9%

2.0%

2.8% 788 331 3.9% 3.2% 2.1% 2.8% 3.9% 5.3%

Nonfarm Employment

6,170 1,522

4,867 1,123

910

1,267

Office-using Employment

-1,131 6.8%

-81

248

Unemployment Rate

4.2%

3.7% 8.8% 7.3% 3.7% 3.8% 5.6%

4.2% 1.3% 4.1% 4.8% 4.2% 5.9%

3.9% 2.7% 2.4% 3.8% 3.8% 5.5% $66.8

Retail & Food Services Sales

4.1% 18.9%

CPI Inflation

1.2% 0.1% 0.9%

6.7% 0.1% 1.5% 2.4%

Federal Funds Rate

10-Year Treasury Rate BAA Corporate Bond West Texas Intermediate Office Sector Net Absorption (msf)

2.1%

$42.7

$77.2

$88.5

$78.7

$65.9

-75.7

-68.5

-37.1

10.6 36.3

15.6 26.1

18.9 21.1

New Supply (msf)

51.9

58.6

49.0

Vacancy

14.8% 16.8%

18.2% -0.9%

18.2% -1.3%

18.4% 18.4%

Effective Rents

-7.3%

-5.7%

0.9%

1.4%

Industrial Sector Net Absorption (msf)

297.5 361.9 5.0%

561.4 361.9

477.3 495.0

230.9 485.7

203.5 409.0

215.4 282.1

New Supply (msf)

Vacancy

3.4%

3.3%

4.7% 5.0%

5.8% 2.3%

6.1% 2.7%

Effective Rents

6.0% 12.8%

20.5%

Retail Sector Net Absorption (msf)

-24.6

36.0 10.2 6.5% 4.2%

40.9

14.5 14.1 5.6% 2.6%

9.7

21.4 14.9 5.5% 2.5%

New Supply (msf)

13.7

9.0

15.8

Vacancy

7.2% 1.4%

5.7% 4.7%

5.7% 2.2%

Effective Rents

Multifamily Sector Net Absorption (units, 000s)

303.0 349.1 4.4%

661.4 345.5

-104.3

267.1 485.6

174.0 292.2 7.2% 2.3%

229.8 246.0

New Supply (units, 000s)

345.7

Vacancy

2.6%

4.9%

6.3%

7.2% 1.5%

Effective Rents

-0.8% 15.6%

8.9%

4.6%

Sources: U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, Federal Reserve, U.S. Census Bureau, Moody’s Investor Services, U.S. Energy Information Administration, CoStar, Axiometrics, Cushman & Wakefield Research *The strong upside scenario represents an upside even compared to a soft landing. Cushman & Wakefield Research views this scenario as a “strong upside scenario” relative to our baseline scenario. The probability can be interpreted as the economy having a 10% chance of performing as well as or better than this scenario, and a 90% chance of performing worse.

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