{"id":1004706936,"date":"2024-03-20T02:10:46","date_gmt":"2024-03-20T10:10:46","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004706936"},"modified":"2024-03-20T11:30:32","modified_gmt":"2024-03-20T19:30:32","slug":"capital-ideas-the-man-to-watch","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/","title":{"rendered":"Capital Ideas: The Man to Watch"},"content":{"rendered":"
\n
\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Therese Fitzgerald<\/figcaption><\/figure><\/div>\n\n\n

In the stock market, the man to watch is still Warren Buffett. He is no longer the richest person in the world. Elon Musk, Jeff Bezos and a handful of others have surpassed him. But his no-nonsense approach to investing makes his corporate picks and putdowns daily news, and his outlook on the economy has become a bellwether worldwide.<\/p>\n\n\n\n

In the real estate capital markets, the man to watch currently is Fed Chair Jerome Powell. Today, at the close of the FOMC\u2019s two-day meeting, Powell will approach the podium and, in his serious but measured manner, give his verdict on the Fed Funds Rate: up, down or hold?<\/p>\n\n\n\n

It is unlikely that Powell will raise rates. Inflation in February was 3.2 percent. Higher than January\u2019s 3.1 percent but still in reach of the 2 percent target. And a drop in rates is not expected until the June announcement\u2014after the Fed has collected more quarters of positive inflation data. Therefore, he is probably going to hold the Fed Funds Rate at 5.25 percent to 5.50 percent.<\/p>\n\n\n

\n

READ THE LATEST:\u00a0 <\/strong>Interest Rates Remain the Same. What Will 2024 Bring?<\/a><\/p>\n\n\n

But what people will be watching for is the signal. If he raises his eyebrows and speaks optimistically of the economy, which he did in February, the fretting over interest rates will calm further and the flicker of momentum currently lifting CRE\u2014the cost of capital is inching down and spreads are tighter\u2014will be fanned.<\/p>\n\n\n\n

If he furrows his brow and speaks of growing fiscal concern, however, that will be \u201cjust as good as an increase,\u201d<\/a> CREFC\u2019s Lisa Pendergast told me recently, and then CRE\u2019s waiting game will continue. (Kind of like the groundhog, but the comparison to Warren Buffett is more dignified for a dedicated public servant and one-time investment banker.)<\/p>\n\n\n\n

Chairman Powell’s expansive reach<\/h2>\n\n\n
\n
\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Federal Reserve Chair Jerome Powell speaks at a press conference following the FOMC announcement in November. Screenshot by Gabriel Frank<\/figcaption><\/figure><\/div>\n\n\n

Powell\u2019s opinion on the economy and interest rates is just one way he\u2019s been impacting the flow of capital to real estate. Two weeks ago, in his annual address to Congress, Powell said the Fed was easing its stance on the Basel 3 Endgame banking reforms proposal, and he didn\u2019t rule out redrafting the plan.<\/p>\n\n\n\n

Under the current proposal, banks and non-bank lending institutions with assets of under $100 billion will have to set aside increased reserves when making commercial real estate loans. That would impact funding flows from big institutions and have a chilling effect throughout the CRE lending universe. Thus, the blowback has been considerable.<\/p>\n\n\n\n

\u201cFirst, we do hear the concerns, and I do expect there will be broad and material changes to the proposal,\u201d Powell told the Congress. \u201cI\u2019m confident that final product will be one that does have broad and material support at the Fed and in the broader world.\u201d<\/p>\n\n\n\n

That was welcome news for CRE executives, and it was a confidence boost. But during his trip to the Hill, Powell also foreshadowed the potential fate of small and mid-sized banks with high concentrations of real estate loans, some of which are also heavily reliant on uninsured deposits. He said the Fed is working with these institutions, but there will be some failures in that corner of the capital markets. Those comments have ignited talk of consolidation.<\/p>\n\n\n

\n

READ ALSO:<\/strong> When Smaller Lenders Retreat<\/a><\/p>\n

\n\n\n

A week later, the Fed announced it was ending its Bank Term Funding Program, which was established following the collapses of Signature Bank, Silicon Valley Bank and a few other regional banks to ensure banks would have adequate funds to service their depositors.<\/p>\n\n\n\n

Indeed, there are more than 4,000 community banks and around 130 regional banks. Can they all make it alone as oodles of CRE loans come due in the next couple of years? Probably not. This month, after losing 7 percent of its deposits in February due to concerns over their real estate loans, New York Community Bank announced a more than $1 billion equity investment<\/a> from a group of investors led by former U.S. Treasury Secretary Steven Mnuchin\u2019s Liberty Strategic Capital, Hudson Bay Capital and Reverence Capital. And there will likely be similar investments.<\/p>\n\n\n\n

Smaller banks serve an important function. The local business that wants to expand their footprint or the regional mortgage broker who’s built a thriving business arranging the bread-and-butter loans would probably like to see most survive in their current form. <\/p>\n\n\n\n

Powell, of course, does not bear the burden of steering U.S. financial markets alone. But as the chair of the 12-member FOMC, he is the bearer of all news\u2014good or bad. And therefore, he has become a living benchmark of commercial real estate\u2019s financial health. He has also been assigned the blame, by some, for raising rates 11 times since the second quarter of 2022. (It bears mentioning that Powell’s announcement will have a big impact on the stock market today, as well\u2014bigger than Warren Buffett for the moment.)<\/p>\n\n\n\n

So, Groundhog Day was already more than six weeks ago, and spring is finally here, but let\u2019s still hope that Chairman Powell doesn\u2019t see his shadow today.<\/p>\n","protected":false},"excerpt":{"rendered":"

All eyes are on Fed Chair Jerome Powell\u2014and not just today. His influence on CRE is far-reaching. <\/p>\n","protected":false},"author":756,"featured_media":1004706954,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21684],"tags":[],"class_list":["post-1004706936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-viewpoint"],"acf":[],"yoast_head":"\nCapital Ideas: The Man to Watch - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Capital Ideas: The Man to Watch\" \/>\n<meta property=\"og:description\" content=\"All eyes are on Fed Chair Jerome Powell\u2014and not just today. His influence on CRE is far-reaching.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-03-20T10:10:46+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-20T19:30:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"804\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Therese Fitzgerald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/\",\"name\":\"Capital Ideas: The Man to Watch - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg\",\"datePublished\":\"2024-03-20T10:10:46+00:00\",\"dateModified\":\"2024-03-20T19:30:32+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg\",\"width\":804,\"height\":620,\"caption\":\"Therese Fitzgerald\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Capital Ideas: The Man to Watch\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713\",\"name\":\"Therese Fitzgerald\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96\",\"caption\":\"Therese Fitzgerald\"},\"description\":\"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/therese-fitzgerald\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Capital Ideas: The Man to Watch - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/","og_locale":"en_US","og_type":"article","og_title":"Capital Ideas: The Man to Watch","og_description":"All eyes are on Fed Chair Jerome Powell\u2014and not just today. His influence on CRE is far-reaching.","og_url":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2024-03-20T10:10:46+00:00","article_modified_time":"2024-03-20T19:30:32+00:00","og_image":[{"width":804,"height":620,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg","type":"image\/jpeg"}],"author":"Therese Fitzgerald","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/","url":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/","name":"Capital Ideas: The Man to Watch - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg","datePublished":"2024-03-20T10:10:46+00:00","dateModified":"2024-03-20T19:30:32+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg","width":804,"height":620,"caption":"Therese Fitzgerald"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/capital-ideas-the-man-to-watch\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Capital Ideas: The Man to Watch"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713","name":"Therese Fitzgerald","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","caption":"Therese Fitzgerald"},"description":"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.","url":"https:\/\/www.commercialsearch.com\/news\/author\/therese-fitzgerald\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/03\/new-headshot-copy.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004706936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/756"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004706936"}],"version-history":[{"count":9,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004706936\/revisions"}],"predecessor-version":[{"id":1004707159,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004706936\/revisions\/1004707159"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004706954"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004706936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004706936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004706936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}