The TreppWire Podcast: A Commercial Real Estate Show 353. From Dot Plot to Deal Flow: Unpacking the Fed's Cut, Retail Data Stays Strong, Paramount’s $1.6B Play, Special Servicing Rates Fall
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Sep 19, 2025 Discussion kicks off with a deep dive into the Federal Reserve's recent rate cut and its effects on commercial real estate capital markets. Strong August retail sales data raises questions about consumer trends and economic stability. On the CRE front, Rithm Capital's $1.6 billion acquisition of Paramount Group and Brookfield’s turnaround of 660 Fifth Avenue highlight major market moves. Special servicing rates are on the rise, with trading alerts revealing significant loan distress in Manhattan and drops in mall valuations, signaling potential challenges ahead.
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Fed Cut Removes Forward Guidance
- The Fed's 25 bps cut removed forward guidance and left the path of future cuts uncertain.
- The September dot plot shows wide dispersion, signaling policy uncertainty for CRE markets.
SOFR Spikes From Treasury Settlement Stress
- Short-term SOFR spikes above IORB were driven by Treasury issuance and dealer financing needs.
- These repo-driven pops reflect technical settlement pressures, not systemic stress.
Low-Leverage Spreads Show Resilience
- TREPI spread data show measured week-to-week moves and lender comfort at low LTVs.
- Multifamily spreads tightened slightly, indicating steadier liquidity in prime segments.