WHAT THE NOVEMBER FED MEETING MEANS FOR CRE INVESTORS
Fed Funds Rate Stays Between 5.25% and 5.50%
- The Fed Funds Rate will remain flat in November, while Wall Street predicts no rate changes until 2024
- However, The Fed also detailed plans to decrease long-term treasury issuance to aid longer-term treasury rates
What Climbing 10-Yr Treasury Rates Means For CRE
- This is unlikely to spark a wave of distress, as long-term investors have likely recorded strong equity growth, making issues with maturing debt unlikely for these properties
- In addition, The Fed has issued guidance on additional loan extensions for lenders with good credit standing
Who Will This Impact?
- Investors who bought in 2021 and 2022 using variable rate financing or rate caps could feel pressure to sell
- However, an abundance of capital is waiting on the sidelines and long-term demand drivers are positive, suggesting discounted pricing may not reach expectations
*Through November 01
Sources: Marcus & Millichap Research Services, Federal Reserve
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