Modest economic growth with a side of volatility 

We expect moderate positive growth that surprises to the upside over the next year. Fiscal and monetary easing, lower taxes and capital investment incentives are likely to help fuel economic growth. The labor market picture will likely remain complicated by productivity gains, immigration impacts, and individuals reentering the workforce. Inflation likely moves mildly higher mid-year on energy pressures from the Iran conflict but moves lower once again later in the year as pressures subside. It is likely that tailwinds from the One Big Beautiful Bill, AI capex, reshoring and productivity and wage gains will be supportive of risk assets. We believe real estate and core infrastructure offer an attractive risk/return in an environment of heightened uncertainty and stretched equity/credit valuations.  

Commercial real estate looks attractive relative to other asset classes 

While commercial real estate values have been slow to recover since 2022, they have been appreciating from trough levels over the last couple of years. After becoming bullish on retail real estate in 2024, we observed the strength of that sector’s recovery last year, where lease growth rates topped the broader real estate market. Senior housing was our favored sector in 2025, and we are seeing improving fundamentals faster than we anticipated. Office properties are beginning to find willing buyers, though the recovery is likely to be an extended one for lower-quality properties. At current pricing levels—relative to most major asset classes—we believe real estate offers a compelling value opportunity in an otherwise expensive market and continues to provide diversification benefits for institutional portfolios.  

Tradeoffs in infrastructure risk  

Infrastructure investors face a growing tradeoff between thematic opportunity and return stability. On the one hand, capital is increasingly shifting towards strategies centered on digitalization, decarbonization, and deglobalization; secular themes from AI and data centers to the reshoring of industrial supply chains drive a compelling narrative but they do not resemble traditional infrastructure risk. We are not convinced that investors are being adequately rewarded, as non-core performance has recently struggled to outperform its core counterpart. Core infrastructure has continued to deliver consistent yields and absolute returns, supported by long-dated contractual cash flows, even as higher interest rates have challenged other asset classes. That said, we believe that lower forward returns may reflect the tradeoff for limited asset price adjustment during the initial rate shock, partially offset by stronger inflation-linked revenue.  

More bearish on natural resources 

Our general philosophy in commodity-oriented sectors is to deploy capital when prices are low for extended periods, so excess capital and supply can be drawn down. We shifted our oil/gas outlook more favorably in 2024, after several years of negative outlooks in the sector. Our view last year was that with oil prices hovering in the $60s and natural gas around $3, an attractive entry point could materialize over the next 12 months. Prices are moving rapidly day to day amid geopolitical events, and sharply higher prices are good for investments in the ground but less attractive for dry powder. We are maintaining our outlook for oil/gas at neutral, pending clarity on where prices stabilize. Mining remains a sector we would generally avoid. With gold, silver, and copper prices hitting historical highs and capital rushing in to capitalize on demand, we would avoid chasing the sector at current levels. 

For more, read our full Institutional Consulting Real Assets Outlook. 

Cerity Partners Retirement Plan Advisors, LLC, doing business as Cerity Partners Institutional Consulting (“CPIC”), is an SEC-registered investment adviser and is a wholly-owned subsidiary of Cerity Partners LLC.  

The information contained herein is not personalized investment, tax, or legal advice and is for informational purposes only. There is no guarantee that any views or opinions expressed will come to pass. This information is subject to change without notice and should not be considered an offer to sell or a solicitation to buy any security. Past performance is not indicative of future results. Before making any decision that may affect your retirement plan or finances, consult a qualified professional adviser. 

Certain statements in this presentation may constitute forward-looking statements based on assumptions and projections. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. 

All return projections, yield estimates, and financial models presented herein are based on assumptions that may not be realized. Key assumptions include, but are not limited to: interest rate environment, inflation expectations, market liquidity, economic growth forecasts, and historical volatility data. These assumptions are subject to change without notice. 

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