Five Takeaways From MBA's Commercial/ Multifamily Finance Convention & Expo

Take a look at a few of JD's key takeaway points from the expo.?

1) Market participants are not optimistic that rates come in during the latter half of 2023. The "everyone's got a guy" whose crystal ball predicts that scenario seems hopeful at best. In one sense, the 10-Year Treasury is efficient in its current range and should allow for transactions to occur.?

2) If a deal works for you, take it. Don't wait, as volatility in the market is still high with low unemployment and sticky inflation, which the Fed seems hell-bent on beating. Volatility can change a deal quickly. Don't compare your deal to someone else or wait for something better as it just may not occur, especially given the outlook on rates.

3) The discount in property values is on paper, but there are no trades in the market to see that realized. Maturities, cap costs, and floating rate debt will force hands, but if you don't have to sell, why do so? The first few owners who sell at a reasonable cap rate will allow the rest of the market to breathe and allow trades to happen.

4) Welcome back, CMBS! Recent trades in the market have CMBS lenders excited for the year as rates are in the 6% range. There is substantial demand for 5-year paper, which the market is figuring out. Get in on it while it lasts as it may not last long.

5) With that, CMBS is still the best execution for office transactions. Office is very market dependent as it seems the workforce in attractive, tertiary cities are fully back in the office while gateway and larger metros are hybrid or still remote. Office will take the largest beating of any asset class but again, is very market dependent. Most lenders are still overweight on office and need to get it off their books, which should create opportunities with maturities. Owners need to invest in their space to attract talent and make sure they want to come into work.