Tag: The Fed

Fed Cuts Rates Again: Slower Path Ahead Amid Inflation Concerns

Posted on by Abigail Grenadier

The Federal Reserve reduced its benchmark interest rate by a quarter percentage point Wednesday, bringing it to a target range of 4.25% to 4.50%. While the cut provides some relief to borrowers, the central bank signaled a more cautious pace for future rate reductions as inflationary pressures persist. (Axios, Dec. 18)

Why It Matters

  • The Fed’s decision reflects its effort to balance slowing inflation with a resilient economy.
  • Powell cited recent data, and not just potential policy changes, justified an adjustment to the inflation forecast. Additionally, the labor market has proven more resilient than officials anticipated when they began rate cuts in September. (WSJ, Dec. 18)
  • “We are at or near a point at which it will be appropriate to slow the pace of further adjustments,” Fed chair Jerome Powell told reporters at a press conference on Wednesday, referring to the decision to cut rates. (Press Conference, Dec. 18)
  • The Fed’s latest quarterly projections suggest a slower path to lower rates, with officials anticipating only two rate cuts in 2025, down from four or five predicted in September. (AP News, Dec. 18)
  • Beth Hammack, President of the Cleveland Federal Reserve, dissented from the decision, advocating for steady rates.

Looking Ahead

  • The incoming Trump administration is expected to pursue policies such as deregulation, tax cuts, and a growth-focused agenda.
  • While policies like deregulation and tax cuts could stimulate growth, tariffs and deportations threaten to exacerbate inflationary pressures.
  • Fed Chair Jerome Powell noted that some officials have started factoring in “highly conditional estimates” of the potential economic impacts of Trump administration policies into their forecasts.
  • The Federal Open Market Committee (FOMC) emphasized that further cuts would depend on incoming data, stating it will assess “the extent and timing” of future adjustments. (Summary of Economic Projections, Dec. 18)
  • The Fed now projects inflation to reach 2.5% in 2025, higher than its September forecast of 2.1%, reflecting expectations of slower progress in curbing price increases. (CBS, Dec. 18)
  • For CRE, adaptability remains key as the macroeconomic environment evolves.

The Fed’s next meeting will be January 28-29, 2025, a week after inauguration, and RER’s all-member State of the Industry (SOI) Meeting on January 22-23. 

CRE Leaders Gather to Discuss Elections, Economy, Housing and More

Posted on by Abigail Grenadier
Roundtable Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone)

This week’s Fall Roundtable meeting came at a pivotal time for commercial real estate, as key policy issues take center stage in Washington. Discussions focused on national policies impacting the industry, including the implications of the recent elections, challenges in capital and credit markets, expiration of the 2017 tax bill, and the federal government’s role in supporting housing supply and regulating energy usage. (Bisnow, Nov. 11)

The meeting also covered topics such as return-to-office trends, office-to-residential conversions, and liquidity concerns. (The Roundtable’s  Fall 2024 Policy Priorities and Executive Summary)

Speakers & Policy Issues

Roundtable members engaged in policy issue discussions with the following guests:

  • Reince Priebus, former White House Chief of Staff (President Trump) and the longest-serving chairman of the Republican National Committee in modern history, gave his perspective on the recent elections, dynamics on Capitol Hill, and potential focus of the new administration in 2025.
(L-R) Roundtable President & CEO Jeffrey DeBoer & Reince Preibus
  • Sen. Tim Scott (R-SC) is the current ranking member and presumed next chair of the influential Senate Banking, Housing, and Urban Affairs Committee and a senior member of the Senate Finance Committee. Sen. Scott advocated for expanding business and homeownership, enhancing financial literacy, and improving affordable housing by reducing regulations and advancing zoning reforms to foster economic growth and equity in communities.
Sen. Tim Scott (R-SC)
  • The Honorable Tom Barkin (President & Chief Executive Officer, Federal Reserve Bank of Richmond), provided a candid assessment of economic recovery and the challenges ahead. He also questioned the fundamental demand for office space as companies reassess their needs in a post-pandemic environment. (Reuters, Nov. 14)
(L-R) RER Board Secretary Jodie McLean (CEO, EDENS) and Tom Barkin
  • Rep. Richard Neal (D-MA) (Ranking Member, House Committee on Ways and Means), addressed the significance and major takeaways of the recent election and the outlook for tax and trade policy going forward. He discussed affordable housing incentives, such as the Low Income Housing Tax Credit (LIHTC) and the bipartisan Revitalizing Downtowns and Main Streets Act (H.R.9002), and extending tax provisions like Section 199A, capital gains. (RER’s Tax Policy Priorities)
Rep. Richard Neal (D-MA)

Next on The Roundtable’s meeting calendar is the all-member State of the Industry (SOI) Meeting, which will include policy advisory committee meetings, on January 22-23, 2025 in Washington, DC. 

Impact of Rate Cuts on CRE and Housing Markets

Posted on by Abigail Grenadier

The Federal Reserve’s recent decision to cut rates renewed optimism in the commercial real estate market, following a prolonged period of high interest rates and economic headwinds. This monetary easing is seen as critical to the CRE sector’s path to recovery—reducing financing costs and helping stabilize property valuations.

Industry Insights

  • These predicted rate cuts, alongside lower bond yields, are expected to boost commercial real estate investment activity and asset values. (CBRE, Sept. 18)
  • Roundtable member Willy Walker (CEO, Walker & Dunlop) appeared on CNBC’s Squawk Box, to discuss the importance of removing barriers such as zoning restrictions to increase housing supply. “It’s going to be a very healthy market for commercial real estate as rates start to come down.” (Watch)
  • Roundtable member David O’Reilly (CEO, Howard Hughes Holdings) discussed the resurgence of new construction in the housing market on Fox Business, anticipating that home prices will stabilize in response to interest rates cuts, influencing both demand and affordability. He also highlighted the effects of prolonged high rates on pricing and market trends. “As long as those rates continue to trend lower… demand picks up, more sales occur, prices will remain steady as home builders continue to deliver more supply to meet that demand.” (Watch)

Housing Affordability at the Forefront

  • The Senate Budget Committee, chaired by Sen. Sheldon Whitehouse (D-RI), held a hearing this Wednesday, Sept. 25, on housing unaffordability. The hearing focused on the need for significant policy reform to boost housing supply, remove regulatory barriers to new construction, and deregulate land use and zoning. (Watch Hearing)
  • Chair Whitehouse introduced the Affordable Housing Construction Act, which aims to tackle the housing crisis by expanding the Low-Income Housing Tax Credit (LIHTC) program, loosening financing requirements, and ensuring affordability for 50 years— an increase from the previous 30-year mark. (Sen. Whitehouse News Release)
  • The bill also pushes for more sustainable, energy-efficient, and accessible housing.

Rate cuts from the Fed are providing relief for both CRE and housing markets, but sustained recovery and resolution of the affordability crisis will require continued policy reform, increased housing supply, and greater collaboration between public and private sectors.

Fed Holds Rates Steady: Implications for Commercial Real Estate

Posted on by Abigail Grenadier

The Federal Reserve chose to maintain current interest rates at the same level since last July, despite calls from economists and policymakers to implement a cut. (AP News, July 31 | Axios, July 31)

Fed’s Decision

  • Fed chair Jerome Powell emphasized the need for data-driven decisions, indicating that future rate adjustments will hinge on economic indicators. (Washington Post, July 31)
  • During the June meeting, Fed officials released their Summary of Economic Projections report, which showed that policymakers penciled in just one rate cut this year, down from the three initially estimated at the start of the year. (RW, June 14)
  • After the decision, Powell said, “a reduction in our policy rate could be on the table as soon as the next meeting in September.” (Barrons, Aug.1)
  • In June, Senators Elizabeth Warren (D-MA), Jacky Rosen (D-NV), and John Hickenlooper (D-CO) wrote to Powell, urging the Fed to cut the federal funds interest rates from a two-decade-high of 5.5 percent, citing that high interest rates are increasing the costs of housing and insurance, and exacerbating the housing supply crisis. (Letter)
  • In their letter on housing prices, they emphasized that “The country is already facing a severe housing shortage, and the Fed’s refusal to bring down interest rates is exacerbating this shortage and driving higher inflation rates…Lower mortgage rates would encourage more people to sell their homes, which would in turn increase housing supply, decrease prices, ease the costs of renting, and ultimately increase homeownership.”

CRE Markets

RER board member Owen Thomas (BXP)
  • With interest rates unchanged at a 23-year high, the commercial real estate sector faces significant challenges, particularly in financing and investment, as higher rates increase borrowing costs and reduce demand for development.
  • Higher interest rates and the pandemic-induced shift to remote work have left a lasting impact on office demand, prompting landlords to rethink space utilization.
  • In a recent interview with Bloomberg Television, RER board member Owen Thomas (BXP) discussed the transformation of the office market and the need for innovation and adaptability in the face of changing tenant needs and market conditions. (Watch interview)

The Fed’s next meeting is scheduled for September 17-18, 2024.

Federal Reserve Leaves Rates Unchanged

Posted on by Abigail Grenadier

The Federal Reserve’s Federal Open Market Committee voted unanimously this week to maintain the federal funds rate at the 5.25%-5.5% range where it has been since July of last year. (Federal Reserve Press Release)

Federal Open Market Committee (FOMC) Meeting

  • After the meeting Wednesday, Fed chair Jerome Powell said at a news conference that he saw either one or two rate cuts this year as “plausible” scenarios. (Axios, June 12)
  • “What everyone agrees on is it’s going to be data dependent,” Powell added.
  • The FOMC issued a statement indicating that lowering inflation to 2 percent is their primary objective before reductions can occur.
  • The FOMC currently anticipates making four quarter-point cuts next year, bringing the federal funds rate down by 1.25 percentage points from its current level.

Congressional Pushback

  • Senators Elizabeth Warren (D-MA), Jacky Rosen (D-NV), and John Hickenlooper (D-CO) wrote to Fed chair Jerome Powell, urging the Fed to cut the federal funds interest rates from its current, two-decade-high of 5.5 percent, citing that other major central banks around the globe have made cuts or are leaning toward lowering interest rates. (Press Release | Letter)
  • Their letter also raises concerns that high interest rates are increasing the costs of housing and insurance, continuing to hurt Americans as rates remain unchanged.
  • On housing prices, the senators wrote: “The country is already facing a severe housing shortage, and the Fed’s refusal to bring down interest rates is exacerbating this shortage and driving higher inflation rates…Lower mortgage rates would encourage more people to sell their homes, which would in turn increase housing supply, decrease prices, ease the costs of renting, and ultimately increase homeownership.”
  • Sen. Sheldon Whitehouse (D-RI), chairman of the Senate’s Budget Committee, and Rep. Brendan Boyle (D-PA), ranking member of the House Budget Committee, also wrote to Chairman Powell echoing their concerns that high interest rates are exacerbating the housing supply crisis. (Letter)

Next week, at The Roundtable’s all-member Annual Meeting, we will hear economic and market forecasts from a panel of Roundtable members and Kenneth T. Rosen, Chairman, Fisher Center for Real Estate and Urban Economics at the Haas School of Business at the University of California, Berkeley; Chairman, Rosen Consulting Group.

Federal Regulators Signal Significant Changes for Proposed Bank Capital Hikes

Posted on by Abigail Grenadier
The Federal Reserve in Washington, DC

Proposed regulations that would dramatically hike capital requirements for the nation’s largest banks may undergo significant changes, which could include a 50 percent reduction in the current mandated increase, according to sources cited by The Wall Street Journal on May 19.

Proposed Capital Requirements

  • Top officials from the Fed are working with regulators from the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC) on “negotiating substantive and technical revisions” to the current proposal, known as the “Basel III Endgame.” (WSJ, May 19)
  • The Real Estate Roundtable strongly opposes the current proposal, which would hike capital requirements by approximately 19 percent for banks with at least $100 billion in assets. (Roundtable Weekly, March 29)
  • Barclay estimates the proposal, if approved without changes, would require eight U.S. global systemically important banks to hold approximately $150 billion more in capital. (WSJ, May 23)

Roundtable Response

Real Estate Roundtable President and CEO Jeffrey DeBoer testifies before House Oversight Subcommittee on April 30, 2024
  • Roundtable President and CEO Jeffrey DeBoer testified this month before a House subcommittee on the health of CRE markets and offered Roundtable policy recommendations, which included rejection of the Basel III Endgame—along with other pro-cyclical regulatory measures that would restrict credit and capital formation. (Roundtable Weekly, May 3 | DeBoer’s oral statement and written testimony)
  • Additionally, a Jan. 12 Roundtable letter and Jan. 16 industry coalition letter urged federal banking regulators to withdraw the proposed rule, emphasizing its potential negative impact on available credit capacity for commercial real estate transactions, market liquidity, and economic growth. (Roundtable Weekly, Jan. 19)

Policymakers Signal Adjustments

Federal Reserve Vice Chair for Supervision Michael Barr
  • The proposal has been met by internal disagreement and concerns among the seven-member Fed Board. (Roundtable Weekly, March 29)
  • Michael Barr, the Fed’s Vice Chair for Supervision, said in a May 20 speech that the central bank is exploring “targeted adjustments” to bank liquidity rules, including Basel III.  In March, Fed Chairman Jerome Powell testified before congressional committees that he expects regulators to “make broad and material changes” to the Basel III proposal. (PoliticoPro, May 20 and Roundtable Weekly, March 8)

The Roundtable’s all-member Annual Meeting on June 20-21 in Washington, DC will address Basel III Endgame and other capital and credit issues impacting CRE.

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Fed Report Cites Office Loans as Potential Economic Vulnerability

Posted on by Abigail Grenadier
The Federal Reserve Board’s semiannual Financial Stability Report, April 2024

Potential losses from certain office real estate loans are an economic vulnerability within the U.S. financial system—yet considered less of a threat than last year, according to the Federal Reserve Board’s semiannual Financial Stability Report. The Fed report noted that if inflation persists and higher interest rates linger during the ongoing, post-pandemic adjustment to remote work, a wave of maturing loans could pose CRE refinancing risks for regional U.S. banks. (Fed report | Bloomberg and Reuters, April 19)

Office Sector Risk

  • The financial stability report focused on four areas of risk, including asset valuations. CRE stress was the third most cited risk, moving down from second in last October’s survey. (KPMG, April 22, 2024 and Roundtable Weekly, Oct. 27, 2023)
  • This month’s Fed report also acknowledged unique strains on CRE, especially in the office sector, “where vulnerabilities have mounted in the post-pandemic period.”
  • The report added that continued economic pressures could reduce investor risk appetite and lead to a “more pronounced correction in commercial property prices.” This, in turn, could “reduce the willingness of financial intermediaries to supply credit to the economy” and further weigh on overall economic activity.
  • Despite ongoing concerns about CRE, the Fed survey also found that the issuance of non-agency securities started to recover in the first three months of 2024.
  • A separate report from DoubleLine shows signs of improvement for the commercial mortgage-backed securities market and other capital markets and notes that borrowers in some sectors, including office, are finding access to credit. (Bloomberg, April 24)

The Roundtable’s all-member June 20-21 Annual Meeting will include a Joint Research Committee and Real Estate Capital Policy Advisory Committee Meeting to drill down into specific CRE capital and credit market trends and issues.

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Fed Cautions About Office Sector as Vacancies Climb and Loan Modifications Surge

Posted on by Abigail Grenadier
La Salle Street, Chicago, Illinois, USA

Recent reports show U.S. office vacancies climbed to nearly 20% during Q1 2024 after loan modifications more than doubled last year compared to 2023. Meanwhile, Federal Reserve Board Vice Chair for Supervision Michael Barr cautioned this week that federal regulators are “looking carefully at banks with heavy concentrations in office commercial real estate where there are significant, expected price declines.” (Moody’s Analytics, April 2 | CRED iQ, March 28 | (C-SPAN video, April 3)

Office Sector

  • Preliminary data from Moody’s Analytics reinforces the long-term, negative ramifications of hybrid work models. The Q1 2024 office vacancy rate set a new record at 19.8%, up from 19.6% in the prior quarter, and beating two historic peaks of 19.3% in 1986 and 1991. (Bloomberg, April 2 | Quartz, April 3 | CRE Daily, April 4)
  • “The office stress isn’t quite done yet,” said Thomas LaSalvia, Moody’s head of commercial real estate economics and an author of the report. He added, “This is part of a longer-term evolution where we are seeing obsolete buildings in obsolete neighborhoods.” (Bloomberg, April 2)
  • Brookfield’s Feb. 14 report, “The Misunderstood U.S. Office Market,” emphasizes that high vacancy rates are due to an excess of dated, functionally obsolete office buildings and an undersupply of offices that satisfy tenants’ changing needs.
  • A Roundtable-led coalition of 16 national real estate organizations urged the expansion of a 20 percent tax credit for qualified property conversion expenditures in an Oct. 12, 2022 letter to policymakers. The recommended enhancements included expanding the category of properties eligible for the credit to various types of commercial buildings such as shopping centers and hotels. (Roundtable Weekly, Nov. 11, 2022)

Fed Oversight & CRE Sectors

Federal Reserve Board Vice Chair for Supervision Michael Barr
  • The Fed’s top market supervisor told the National Community Reinvestment Coalition on April 3 that CRE refinancing deals will “take some time to work through” as the Fed closely monitors office sector conditions. (C-Span | BGov, April 3 | Roundtable Weekly, March 8)
  • Barr said, “This is the kind of thing where it is likely a slow-moving train as the financial sector and commercial real estate market move forward. Over the next two to three years, we are going to see how properties deal with refinancing in a higher interest rate environment. Occupancy rates have lowered because of work-from-home, so for some categories of office CRE they are more exposed to risk.”
Kathleen McCarthy
  • Kathleen McCarthy, global co-head of Blackstone Real Estate and chair-elect of The Real Estate Roundtable, commented to CNBC’s “Closing Bell Overtime” on April 3 that the office sector is different from other CRE investment areas that have performed well. “We do feel like there’s a bottoming happening. There’s no V-shaped recovery … but we do see the cost of capital coming down, we’re seeing more liquidity in markets, and perhaps more importantly for the long term, we’re seeing a sharp decline in new supply,” she said.
  • Barron’s recognized McCarthy this week as one of the 100 Most Influential Woman in Finance. She commented on her upcoming role as Roundtable Chair: “To bring together my interest in policy and have a position to help our whole industry in Washington is really exciting.” (Barron’s, April 4)

Commercial and multifamily market conditions will be discussed during RER’s April 15-16 Spring Meeting in Washington DC (Roundtable-level members only) with guests including White House Council of Economic Advisers Chairman Jared Bernstein,  House Democratic Leader Hakeem Jeffries (D-NY), and House Financial Services Member French Hill (R-AK). 

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Fed Signals Significant Changes Ahead for Basel III Endgame Proposal

Posted on by Abigail Grenadier

Federal Reserve Board Vice Chair for Supervision Michael Barr said in a recent speech that he is working with other regulators on “broad and material changes” to a sweeping banking proposal known as the “Basel III Endgame.” The proposal, opposed by The Roundtable, would hike capital requirements for banks with at least $100 billion in assets by approximately 19 percent. (Bloomberg, March 22, 2024 and Congressional Research Service, Nov. 30, 2023)

Fed Statements

  • Barr said during his March 22 University of Michigan remarks, “I am working very closely with (Fed) Chair (Jerome) Powell and other members of our Federal Reserve board to try to reach a broad consensus” on revisions to the proposal.
  • The Fed, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) approved the 1,100-page proposed rulemaking last July by an unusually close 4-2 vote.  See Interagency Overview of the Notice of Proposed Rulemaking for Amendments to the Regulatory Capital Rule, July 27. (Roundtable Weekly, July 28, 2023)
  • Powell voted for the original rulemaking proposal but noted a significant tone of caution. Statements by Fed Governors Michelle W. Bowman and Christopher J. Waller bolstered their opposition to the proposal.

Basel III and CRE

The Federal Reserve Building in Washington DC
  • The Real Estate Roundtable urged federal regulators to withdraw the proposed rulemaking in a Jan. 12 letter that raised industry concerns about its negative impact. The comments outlined how the proposal would decrease real estate credit availability, increase commercial and multifamily properties’ borrowing costs, and negatively impact the U.S. economy.
  • Real Estate Roundtable President and CEO Jeffrey DeBoer also stated in a March 2023 comment letter to Barr and other key regulators, “At this critical time, it is important that the agencies do not engage in pro-cyclical policies such as requiring financial institutions to increase capital and liquidity levels to reflect current mark to market models. These policies would have the unintended consequence of further diminishing liquidity and creating additional downward pressure on asset values.”
  • The Mortgage Bankers Association (MBA) reported last month that 20 percent ($929 billion) of the $4.7 trillion of outstanding commercial mortgages held by lenders and investors will mature in 2024. That represents a 28 percent increase from the $729 billion that matured in 2023, according to MBA’s Commercial Real Estate Survey of Loan Maturity Volumes.

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) will respond to any further changes to the Basel III proposal or other federal policies impacting capital and credit issues.

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Fed Chairman Testifies on Regional Bank Loan Concentrations in CRE, Basel III Proposal Changes

Posted on by Abigail Grenadier
Fed Chair Jerome Powell addressed CRE concerns in an exchange with Sen. Catherine Cortez Masto (D-NV)

Federal Reserve Chair Jerome Powell testified before congressional committees this week about the risks posed by commercial real estate loans to regional banks—and that he expects “broad and material changes” to a regulatory proposal to hike bank capital requirements known as “Basel III.” (The Hill, March 7 and Reuters, March 6)

CRE Concerns & Banking

  • The Senate and House hearings focused on the Fed’s March 1 Monetary Policy Report to Congress. The publication stated, “Credit quality at banks remained strong, although the quality of CRE loans backed by office, retail, and multifamily buildings continued its decline, a result of the lower demand for downtown real estate prompted by the shift toward telework.” The report also noted, “Low levels of transactions in the office sector likely indicated that prices had not yet fully reflected the sector’s weaker fundamentals.”
  • During a March 7 Senate Banking Committee hearing, Fed Chair Powell responded to questions from Sen. Catherine Cortez Masto (D-NV) that he expects some smaller banks with high commercial real estate office concentrations will fail, but that risks posed by these loans are “manageable.” (Watch a video clip of the exchange, above)
  • Similar concerns were raised by policymakers with Powell during a March 6 House Financial Services Committee hearing. The Fed chair addressed why he expects manageable bank losses and added, “We’ve had a secular change in the economy, which has left office demand significantly lower, at least temporarily, and perhaps for a long time. The same is true in some downtown retail (properties) associated with office workers. So it’s a shock to the system.”

Basel III Changes

Senate Banking Committee
  • The committees also heard Powell state that the “Basel III” regulatory proposal, which would significantly increase capital requirements for banks with at least $100 billion in assets, is likely to be overhauled after an enormous private sector response. He commented to the Senate panel, “We do hear the concerns and I do expect that there will be broad and material changes to the proposal.” He told House lawmakers that a rewrite of the proposal is a “very plausible option.” (Fortune and GlobeSt, March 7 | Bloomberg and PolitcoPro, March 6)
  • The Real Estate Roundtable raised industry concerns about the negative impact of the Basel III proposal in a Jan. 12 letter to the Fed and other agencies. The comments outlined how the proposal would decrease real estate credit availability, increase borrowing costs for commercial and multifamily real estate properties, and negatively impact the U.S. economy—and urged federal regulators to withdraw their proposed rulemaking.
  • The New York Times DealBook reported this week that Basel III could crimp lending as some banks struggle with office portfolios and a looming “maturity wall” of $1.5 trillion in CRE loans come due over the next two years. (New York Times, Feb. 7)

Industry Views

  • On March 6, Roundtable Board Member Scott Rechler (Chairman and Chief Executive Officer, RXR) told CNBC’s Squawkbox that high interest rates, price discovery, and the amount of maturing CRE loans have resulted in a “slow-moving train wreck” for regional banks.
  • Rechler, a member of the New York Fed’s Board of Directors, said, “There’s a balance. The longer rates stay higher, there’s more distress. For the industry, there’s enough imbalance right now that some level of rates moderating will help ease this transition.  Capital structures are upside down. They’re going to need to be re-equitized, there’s going to be write-offs. So if you can bring down (interest rates), it can create some transaction activity.” (Squawkbox, March 6)
  • Squawkbox also featured Roundtable Member Marty Burger (Infinity Global Real Estate Partners CEO and former Silverstein Properties CEO) on Feb. 28 to discuss office-to-residential conversion opportunities in the current CRE environment. (CNBC, Feb. 28)

Today, RER’s Immediate Past Chair Debra Cafaro (Chairman and Chief Executive Officer, Ventas, Inc.) discussed the CRE market with a focus on the senior housing sector on Bloomberg Markets. “For the commercial real estate sector writ large, those tightening financial conditions are having an impact, particularly in sectors like office, where you have the demand fall off. There will be an impact on the smaller lenders. It is something the system will have to absorb over time with $1 trillion of real estate loans coming due in 2024. It is having an effect. The best elixir for that might be lower rates,” Cafaro said.

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