More Uncertainty

The Federal Reserve hiked its benchmark interest rate again on Wednesday, and commercial real estate is beside itself heading into 2023. Plus, this year seemed to mark a shift in CRE’s focus on ESG. Will that focus hold in the new year?

These stories are part of our Daily Round Up, Click here to get it delivered straight to your inbox.

— Tom Acitelli, Co-Deputy Editor

Fed Closes 2022 With Seventh Rate Hike Leaving CRE in Limbo for 2023

Commercial real estate financiers and borrowers alike remain in flux after the Federal Reserve closed its 2022 calendar with the year’s seventh interest rate hike, and no clear sign of the hikes letting up in early 2023. The central bank announced a 50 basis point (bp) hike Wednesday afternoon, placing the federal funds rate between 4.25 percent to 4.5 percent — its highest level since December 2007 and a stark contrast to near-zero short-term borrowing conditions that existed in early 2022. While the Fed ended its streak of four consecutive 75 bp increases, it indicated in its statement following the meeting that rates will continue to climb into 2023 in an effort to combat inflationary pressures.

Read the rest of the story

The Year in ESG: Climate Regulation Takes Center Stage

New year, new ESG? On New Year’s Eve, the ball in Times Square is slated to drop, but the ball for ESG (environmental, social and corporate governance) will keep on rolling into 2023. After a year of net-zero, diversity, equity and inclusion (DEI), and legislative efforts, it’s safe to declare ESG more than a fad or, in the spirit of the new year, more than a resolution. This year, ESG trends in commercial real estate reflected those of the nation at large.

Read the rest of the story

---------------------------------------------------------------------------------

Enjoying these stories on all things CRE? Unlock unlimited access to our content?with a subscription. And for a daily version of this newsletter,?sign up here.