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CRE Gets Ready for Imminent Rate Cut – Karlin Conklin interviewed

Woodland Hills, CA – August 26, 2024 – Federal Reserve Chair Jerome Powell indicated that interest rate cuts are imminent, signaling a shift towards easing monetary policy to address inflation, which is nearing the Fed’s 2% target. In his speech at the Kansas City Fed’s conference in Jackson Hole, Powell suggested that the timing and extent of rate cuts will be influenced by incoming data and evolving economic conditions.

Markets anticipate the Fed will announce its first rate cut during its upcoming September policy meeting. Powell’s remarks suggest there is room to lower borrowing costs, which could help support the labor market and stabilize economic conditions.

Experts in the commercial real estate sector are particularly focused on these potential rate cuts. Pierre Debbas of Romer Debbas emphasized that reducing rates is crucial to avoid distress in real estate markets and prevent further regional bank failures. With significant commercial real estate debt maturing, lower rates could facilitate refinancing and stabilize the sector.

Karlin Conklin of Investors Management Group expects falling rates to boost commercial real estate activity by reducing cap rates and improving property values. Anita Verma-Lallian of Arizona Land Consulting predicts that lower rates will lead to a surge in construction and development, positively impacting the economy by creating jobs and addressing inventory shortages.

Read the full article at Commercial Property Executive online
Published August 26, 2024
By Richard Berger