The TreppWire Podcast: A Commercial Real Estate Show 369. Before Circling Back: Jobs Data, Fed Policy, CRE Strategy Featuring Ground Leases, Data Centers, Investor Trends & More
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Dec 19, 2025 This discussion dives into the Fed's recent rate cuts and their impact on commercial real estate financing. The November jobs report reveals surprising payroll gains yet an uptick in unemployment. There's a heated debate on the viability of data centers amid potential oversupply and infrastructure issues. Rent concessions are examined as economic vacuums, obscuring true market rent dynamics. The hosts also share insights on trading alerts, including major real estate deals in Hawaii, and look ahead to the 2026 property market.
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Stability Shifts Focus To Fundamentals
- Rate volatility has narrowed after three 25-basis-point cuts, shifting focus from day-to-day rates to credit fundamentals.
- Stability should move markets toward spreads, underwriting, and deal flow if data confirms the easing cycle.
Underwrite To Net Effective Rents
- Account for concessions and economic vacancy when underwriting because headline rent growth can mask falling effective rents.
- Use net effective rents in DCFs and DSCR calculations to avoid overestimating NOI.
Jobs Print Shows Neutral But Noisy Signal
- November payrolls rose modestly while unemployment ticked to 4.6%, signaling a neutral labor read with mixed implications for policy.
- Powell's note on potential data revisions means short-term prints require cautious interpretation.