Hold That Rate Cut
Commercial Observer
Connecting and informing industry leaders of trends and individuals defining the global commercial real estate landscape
The year started with expectations of at least three cuts to the Federal Reserve’s benchmark borrowing rate. Now it looks like 2024 will be lucky to see one — at least according to remarks on Tuesday by Fed Chairman Jerome Powell. The news is unwelcome for most in commercial real estate. Also for today: A nine-figure CMBS financing deal in D.C.
— Tom Acitelli, Deputy Editor
Powell Hints Fed Won’t Lower Interest Rates Until Late This Year
The Federal Reserve isn’t quite ready to lower interest rates. During a panel discussion Tuesday at the Wilson Center in Washington, D.C., Fed Chairman Jerome Powell said that continued inflation increases mean the central bank would likely delay any interest rate cuts until late this year. “Recent data have clearly not given us greater confidence" that inflation is fully under control and "instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said to the panel. Powell’s shifted stance on rate cuts comes about a month after he told a Senate committee in early March that the Fed was “not far” from cutting rates. Although the economy is growing at record levels, inflation stubbornly rose to 3.5 percent in March, up from 3.2 percent in February. Both are well above the Fed’s goal of 2 percent annual inflation.
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Citi Real Estate Funding Provides $207M CMBS Funding for Two DC-Area Offices
A top developer in Northern Virginia has turned to the CMBS market to refinance two of its prized office assets. Monday Properties has secured a combined $207 million to refinance its trophy office tower at 1812 North Moore Street in Arlington, Va., and its 206,000-square-foot medical office building Shirlington Gateway, Commercial Observer has learned. Citi Real Estate Funding provided a pair of five-year, fixed-rate commercial mortgage-backed securities loans to recapitalize the two properties. Citi refinanced 1812 North Moore Street for $173 million and Shirlington Gateway for $32 million. Anthony Westreich, founding managing partner of Monday Properties, told CO that Citi was the original lender at 1812 North Moore Street and that his firm had refinanced Shirlington Gateway with the bank in December.
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