{"id":1004729247,"date":"2024-09-18T00:57:44","date_gmt":"2024-09-18T08:57:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004729247"},"modified":"2024-09-30T02:06:33","modified_gmt":"2024-09-30T10:06:33","slug":"nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut\/","title":{"rendered":"NYC Executives Stay Sober-Minded on Eve of Expected Rate Cut"},"content":{"rendered":"\n

<\/p>\n\n\n

\n
\"The<\/a>
Maya Khan, managing director of CBIZ Marks Paneth, moderates a discussion between Anna Rathbun, the firm’s chief investment officer, as well as Rosen Equities CEO David Koeppel and Brian Steinwurtzel, co-CEO & principal at GFP Real Estate. Image by Gabriel Frank<\/em><\/figcaption><\/figure><\/div>\n\n\n

Ahead of the Federal Open Markets Committee\u2019s pivotal meeting this week, a panel of New York City-based owners and investors in office and retail appeared to be optimistic, yet realistic in assessing their challenges.<\/p>\n\n\n\n

At a Sept. 17 discussion, hosted by CBIZ Marks Paneth and called ‘Manhattan to Main Street: Real Estate\u2019s Pulse in New York and the Nation,’ the firm\u2019s own CIO, as well as the CEOs of Rosen Equities and GFP Real Estate, shared thoughts on affairs both local and national. Discussion ranged from sustainability-focused legislation to the viability of office-to-residential conversions.<\/p>\n\n\n\n

The economy: Wins and woes<\/p>\n\n\n\n

While the Federal Reserve\u2019s imminent interest rate cut<\/a> is a welcome development, more long-term financing and investment strategies call for level heads. For starters, with a single rate cut, the funds rate will remain at its highest in more than two decades, all the while inflation, though considerably improved, is still above the Fed\u2019s target of 2 percent.<\/p>\n\n\n\n

\u201cIt is going to be higher, which will keep rates higher,\u201d predicted Anna Rathbun, CBIZ\u2019s CIO. \u201cIf you\u2019re an investor, it will not make or break anything, but they are starting a cycle.\u201d<\/p>\n\n\n\n

Following a rate cut, both bond ratings and loan maturities are of interest, particularly in the CMBS space, of which $2.2 trillion will expire by 2028. \u201cIn terms of stability, bonds are going to be re-rated and potentially written down in certain portfolios,\u201d Rathbun predicted. The result? \u201cA bifurcation of (assets) that are sensitive to them and those that are not.\u201d<\/p>\n\n\n\n

\n\n\n\n

READ ALSO:<\/strong> CPE Asks: What Makes a Distressed Office Property a Good Investment?<\/a><\/p>\n\n\n\n

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GFP Real Estate, which owns and operates office properties around New York City, in turn sees any rate relief as doing more for sentiments than it will for high capital costs and cap rates<\/a>. <\/p>\n\n\n\n

\u201cIt\u2019s not about what rates are today, but (it\u2019s) that forward curve, and what they are perceived to be,\u201d said Brian Steinwurtzel, GFP\u2019s co-CEO & principal. \u201cWe need to execute loans not in this moment, but in three, four, five or seven years.\u201d<\/p>\n\n\n\n

The good news? Institutional investors are eagerly anticipating a more certain market. \u201c(There\u2019s) a lot of dry powder waiting for those prices to drop,\u201d according to Rathbun.<\/p>\n\n\n\n

Goings-on around town<\/p>\n\n\n\n

Investing in and operating Manhattan office properties that are not Hudson Yards or One Vanderbilt remains a risky proposition, but converting obsolete stock<\/a> is still a promising\u2014if at times difficult to sell\u2014alternative. <\/p>\n\n\n\n

\u201cIf you buy them cheap enough, you can do almost anything to a building,\u201d reasoned David Koeppel, CEO of Rosen Equities. Still, residential conversions, even for the GFP-owned Flatiron building, have their limitations, particularly where project costs and aesthetics are concerned. As an example, \u201cwe can\u2019t economically change the fenestration,\u201d Koeppel said.<\/p>\n\n\n\n

Koeppel had the same sentiments for the Big Apple\u2019s ESG compliance laws. \u201cLocal laws 97<\/a>, 88, 132 and 134 are all well-intentioned, but the owners of the buildings don\u2019t use the majority of electricity,\u201d Koeppel noted. In fact, these regulations are a direct discrepancy with the city mulling a mandate for indoor temperatures of residential buildings to not exceed 78 degrees, according to The Real Deal<\/em>.<\/p>\n\n\n\n

One area that panelists saw particularly sticky was the ubiquity of hybrid work, as employees become more enthusiastic about working in-person. \u201cWe will reach an equilibrium where working from home is seen as a luxury,\u201d Rathbun weighed in.<\/p>\n","protected":false},"excerpt":{"rendered":"

Some challenges remain sticky for both investors and developers.<\/p>\n","protected":false},"author":3012,"featured_media":1004729251,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,21783,1600,21742,10,21747,51037],"tags":[52484,42380,52485],"class_list":["post-1004729247","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-investment","category-new-york","category-latest","category-northeast","category-office","category-trends","tag-cbiz-marks-paneth","tag-gfp-real-estate","tag-rosen-equities"],"acf":[],"yoast_head":"\nNYC Executives Stay Sober-Minded on Eve of Expected Rate Cut - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Despite a period of more economic certainty, some latent challenges remain for investors and developers in the Big Apple.\" \/>\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\/nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NYC Executives Stay Sober-Minded on Eve of Expected Rate Cut\" \/>\n<meta property=\"og:description\" content=\"Despite a period of more economic certainty, some latent challenges remain for investors and developers in the Big Apple.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut\/\" \/>\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=\"2024-09-18T08:57:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-09-30T10:06:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/09\/CBIZpd.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1440\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\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\/nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/nyc-executives-stay-sober-minded-on-eve-of-fed-rate-cut\/\",\"name\":\"NYC Executives Stay Sober-Minded on Eve of Expected Rate Cut - 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