Fed could hold interest rates near zero for years

Fed could hold interest rates near zero for years

The Federal Reserve will keep its key interest rates close to zero until inflation exceeds its 2% target, something most Fed board members do not expect to happen before 2023. "Effectively what we are saying is that rates will remain highly accommodative until the economy is far along in its recovery," Fed Chair Jerome Powell announced. Read full story Read more

Weekly jobless claims rise for first time in months

Initial unemployment claims reached 1.4 million last week, marking an increase of 109,000 on a seasonally adjusted basis, according to the Labor Department. It was the first increase in weekly claims in almost four months. "I think unemployment applications are going to be sticky at this level because many states are seeing a reassertion of the virus," says Michelle Holder, an economist at John Jay College. Read full story Read more

Podcast: Improving CMBS Delinquency Rates?

We’re only mid-way into July, but early indications are that delinquency rates are improving. In this week's episode of The TreppWire Podcast, we examine the factors behind a potentially declining CMBS delinquency rate, noteworthy CRE headlines of the week, the CMBX 10 index, shifts in the office market, and takeaways from bank earnings. Listen now. Read more

4.8M jobs added to payrolls in June, Labor Dept. says

Nonfarm payrolls gained 4.8 million jobs last month, according to the Labor Department, beating expectations from economists surveyed by Dow Jones. The unemployment rate declined to 11.1%. Read full story Read more

Coronavirus drives $21B of CMBS loans to special servicing

About $21 billion of CMBS loans have been moved to special servicing since the middle of March -- more than double the total for all of 2019, according to Fitch Ratings. Hotel and retail properties have accounted for the most transfers to special servicing. Read full story Read more

Lawmakers ask for relief for CMBS borrowers

More than 100 members of Congress are requesting that the Federal Reserve and the Trump administration support real estate borrowers who are unable to keep up with payments on debt tied to CMBS. "Without a long-term relief plan in the face of an elongated crisis, CMBS borrowers could face a historic wave of foreclosures starting this fall, impacting local communities and destroying jobs for Americans across the country," according to a letter from the lawmakers. Read full story Read more

Fannie, Freddie announce financial advisers

Fannie Mae has hired Morgan Stanley and Freddie Mac has hired JPMorgan Chase as financial advisers, a necessary step toward recapitalization and an exit from government custodianship. Federal Housing Finance Agency Director Mark Calabria has told lawmakers the exit plans have been delayed by the coronavirus pandemic and could be further affected by borrowers' repayment difficulties. Read full story Read more

CBO: Coronavirus recovery could take 10 years

The economy will require as long as a decade to recover from the coronavirus pandemic, the Congressional Budget Office says. The CBO has cut its forecast for economic output from 2020 to 2030 by $7.9 trillion, or 3% of GDP. Read full story Read more

US GDP fell faster than previously thought in Q1

US GDP fell at an annual rate of 5% in the first quarter, surpassing the earlier estimate of a 4.8% drop, according to the Commerce Department. Economists believe GDP could fall at a much faster pace in the current quarter before rebounding in the third quarter. Read full story Read more

Fed chair sees need for more economic relief

Federal Reserve Chairman Jerome Powell noted that the pandemic could cause long-term damage to the economy and asked lawmakers to consider additional spending to mitigate the harm. Read full story Read more

CBRE forecasts long recovery period for CRE

The recovery of the US commercial real estate sector will take place after the recovery of the broader economy, and some asset classes could take as long as 30 months to rebound, according to CBRE. "It will take several years for vacancy rates to fall back to their pre-crisis levels," says CBRE's Richard Barkham. Read full story Read more

Servicers face “greatest nightmare ever” as coronavirus spreads

There is no question that mortgage originators have faced difficulties in the past few weeks. But for servicers, the situation is much more dire as they face problems on multiple fronts caused by the virus, along with the increase in demand. Read full story Read more

Fed ready to inject more than $5T into system

The Federal Reserve will offer to inject a total of more than $5 trillion in liquidity into funding markets in coming weeks to manage short-term financing rates. Read full story Read more

Class B & C Investors Circling Secondary, Tertiary Markets

With demand stronger than ever, competition is stiffest for older properties with potential. Read full story Read more

Individual investors flock to public non-listed REITs

Individual investors are showing enthusiasm for public non-listed REITs in the hopes of securing strong returns and stable income flows. Investment firms brought in $10 billion for these funds during the first 11 months of last year, up from a combined total of $8.8 billion for 2018 and 2017, according to Robert A. Stanger & Co. Read full story Read more

2020 Multifamily Real Estate Predictions

Research firm CBRE highlights healthy growth in the suburban multifamily market that will outpace performance in urban centers. These areas will enjoy lower vacancy rates and post higher rent growth. Read full story Read more

Powell’s messaging on interest rates will be carefully crafted

The market is expecting the Federal Reserve to make another quarter-percentage-point rate cut during its meeting this week, but it is is less clear what signals the Fed will send about future policy decisions. Fed Chair Jerome Powell will likely seek to develop a message that avoids market backlash without suggesting that there definitely will or won't be additional rate cuts. Read full story Read more

As Flood and Terrorism Insurance Programs Near Expiration, Multifamily Borrowers Fear an Increase in Rates

The owners of apartment properties may soon struggle to renew insurance policies for floods and terror attacks, and that may already be increasing the difficulty in securing financing or refinancing for those properties. Read full story Read more

Fed makes 2nd consecutive rate cut

The Federal Reserve has reduced the benchmark overnight lending rate by a quarter percentage point to a range of 1.75% to 2%. Chairman Jerome Powell says that prospects for the US economy are favorable and that any future interest-rate adjustment would be made "meeting by meeting." Read full story Read more

OECD forecasts slowest global growth in 10 years

The Organization for Economic Cooperation and Development is projecting global economic growth of 2.9% this year, the smallest annual increase in 10 years, as the US-China trade conflict continues. The OECD downgraded its forecast for the US and now expects GDP growth of 2.4% in 2019. Read full story Read more

Interest rates expected to be cut by a quarter point

Another rate cut from the Federal Reserve is expected when the central bank meets in two weeks, and it could be a quarter-point decrease. Opinions among the Fed's bank presidents differ, with some saying no additional rate cuts are needed and Federal Reserve Bank of St. Louis President James Bullard calling for a bigger cut. Read full story Read more

Advisors—And Clients—Aren’t Rattled by Market Plunge

Many advisors have trained their clients to expect the kind of market volatility seen Monday. And while most aren’t making any sudden movements, some are tweaking asset allocations. Read full story Read more

The Trump Bump is Kaput

Has confidence in the stock market fatally slipped? Read full story Read more

Americans want more affordable housing, just not in their neighborhoods

As housing affordability continues to be a national concern, several states have introduced zoning legislation that aims to tackle the issue. But a new survey from Redfin indicates that more than half of the nation’s homebuyers and sellers claim to oppose the building of dense housing in their neighborhoods. Read full story Read more

What Does the Fed’s Interest Rate Cut Mean for the CRE Industry?

The Fed’s interest rate cut is unlikely to boost commercial real estate values, according to industry sources. Read full story Read more

Fed signals rate cut might be one-off

The Federal Reserve has lowered its benchmark interest rate by a quarter percentage point, the first decrease since the financial crisis. Chairman Jerome Powell's comment that the action is "not the beginning of a long series of rate cuts" triggered a stock market sell-off and criticism from President Donald Trump. Read full story Read more

Securitization Programs Bring Capital to Affordable Housing

Appetite to purchase tax-exempt bonds is at high level, according to finance leaders. Read full story Read more

Real estate currently favored over stocks

The preference for real estate investments compared to other asset classes such as stocks is strong right now, says Greg McBride, Bankrate.com chief financial analyst. He notes that the 20% drop in the stock market last year rattled a lot of investors and that stocks haven't quite shed their stigma from the financial recession ten years ago, especially among Millennials. Read full story Read more

How Opportunity Zones Will Impact Real Estate Finance

The federal program is expected to fuel the development of small and midscale multifamily assets. Read full story Read more

Despite risks more REITs issuing commercial paper

REITs are increasingly issuing commercial paper because of their cheaper borrowing rates. There is a risk to using short-term debt obligations because lenders could suddenly lose confidence in them in an unexpected event such as a financial crisis. Read full story Read more

Fed chair testimony signals a possible rate cut

Fed Chair Jerome Powell told Congress Wednesday morning that the US economy has not improved in recent weeks, noting "that uncertainties around trade tensions and concerns about the strength of the global economy continues to weigh on the US economic outlook." The market is interpreting his remarks to mean that the Fed will cut its benchmark short-term interest rate later this month. Read full story Read more

NMTCs Might Expire Again

Advocates want Congress to renew the New Markets Tax Credit (NMTC) program before it expires after 2019. Read full story Read more

Second Round of Opportunity Zone Guidance Released

Treasury, IRS create flexibility to position incentive for success. Read full story Read more

Property Prices Keep Rising in the Student Housing Sector

Average cap rates on student housing transactions are now near those paid for apartment buildings. Read full story Read more

Freddie Mac Announces New Head of Multifamily

Deborah Jenkins has been named executive vice president and head of Freddie Mac’s multifamily business. She also has assumed a role as member of… Read full story Read more

REIT Forecast: Rent Growth Expected to Increase in 2019

Jim Sullivan, managing director of BTIG, an institutional brokerage firm based in San Francisco, has increased his earnings estimates for Equity… Read full story Read more

Is U.S.-Style Multifamily America’s Next Big Export?

When Greystar first bought into a 6,900-bed student housing portfolio in the U.K. in 2013, its investment dollars were bucking what was quickly... Read full story Read more

Steady interest rates should buoy CRE transactions

Tax cuts and a robust economy helped commercial real estate prices rise 6.2% in 2018, putting them nearly 30% above 2007 levels, according to Real Capital Analytics. With the Federal Reserve's announcement that it would keep rates steady, sales could rise higher, as borrowing costs will remain low, said Sam Chandan, head of New York University's Schack Institute of Real Estate. Read full story Read more

Chinese investors pull back on US real estate

Chinese individuals and entities sold $854 million more in US commercial real estate than they bought in the fourth quarter, according to Real Capital Analytics. That was the third quarter in a row that Chinese real estate investors were net sellers, and it was the lowest level of commercial real estate investment from the country since 2012. Read full story Read more

Fed reconsiders its bond runoff timeline

The Federal Reserve is considering wrapping up its tactic of allowing trillions of dollars' worth of mortgage and Treasury securities to mature without reinvesting the proceeds elsewhere. When the process began in October 2017, an official said the runoff could last five years. Read full story Read more
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