Going forward, there are a couple of things going on. The Treasury has certainly responded; the 19-year is up 80 basis points. It's really going to depend on what the indicators say going into the first quarter of the year. If we start seeing inflation, we will see the rate increases. That's really the wild card.

As far as our industry is concerned, there's always an impact. The short-term rate increase has been quickly baked in, and to be honest, I think the holiday season is hitting us at the absolute perfect time, because any time there's a rate increase, there's that pregnant pause. People will go home for the holidays and come back in January with a mindset that this might become more of the new normal. We've all been spoiled with the historically low rates that were never going to be sustainable at the level they've been at.

Long term, one thing I'm seeing and continuing to focus on is, what does liquidity look like? What are we hearing from the agencies, what are we hearing from the life companies, what are we hearing from the securitized world? While the securitized world is trying to get their own new normal, what you're seemingly hearing from everybody else is that the liquidity is still there. I haven't talked to a single lender that is cutting back the amount of dollars they want to get out in 2017. If anything, there has been a little nervousness about the pipeline potentially being a little quiet in the first quarter because of rate increases. There's probably some room in the spreads in terms of the rates being quoted today; if the pipelines do become a little quiet in Q1, you might see some spread compression from the various lender types. If the pipelines stay full, I don't think you'll see much compression.

The world's biggest mystery right now is what this new administration is going to do. It's certainly making it more interesting again.

GlobeSt.com: So the rate increase is just one piece of the puzzle, whereas in the buildup to the first increase in almost a decade last year, some people were giving it more weight than it warranted.

Katai: Right. And right now it does look as though we'll see those rate increases that they're talking about for next year. Part of the business for a company like ours is that when rates start going up, it's imperative that you become more creative. You probably have to start working a little harder when it comes to the capital stack. And there's a recalibration that has to occur, because as you know, everything in the real estate sector is return-driven.

An increase of 25 or 50 basis points creates that pause, but the rate has been so historically low that people can absorb that. The question will be how quickly investors can figure out what level of returns is acceptable. And hopefully we'll get the economic growth that pushes rents too.

SOUTHFIELD, MI—Over the past five days since the Federal Reserve's Federal Open Market Committee closed out 2016 with a widely expected increase in the federal funds rate, GlobeSt.com has sounded out perspectives on the FOMC's action from a variety of viewpoints. First, we interviewed Cushman & Wakefield's chief economist, Ken McCarthy, for an immediate reaction. Next, Madison International Realty president Ronald Dickerman weighed in from the standpoint of an investor. Now, to represent the lending community, here's Ernie Katai, EVP and head of production at Berkadia.

GlobeSt.com: Obviously, in the near term the FOMC has raised the federal funds rate another quarter-percentage point. Longer term, they may be more aggressive in terms of increasing the rate more frequently. What are you seeing, near term and longer term?

Ernie Katai: Two days after the Fed's decision, I picked up the Wall Street Journal and saw that new housing starts were down 18%. So none of us really know what's coming in the next few weeks; I'm not sure the economy is quite as strong as the run-up we've seen since the Trump election, so we're going to have sift through that a little.

The Fed certainly did a good job of telegraphing this increase. Earlier in the year, there was talk of maybe increasing the rate three or four times, and in looking at the economy, which is what I always defer to, I just didn't see it. I was asked that question point blank and I said, “Two increases maximum, and I would be shocked if there were any more than that.”

Going forward, there are a couple of things going on. The Treasury has certainly responded; the 19-year is up 80 basis points. It's really going to depend on what the indicators say going into the first quarter of the year. If we start seeing inflation, we will see the rate increases. That's really the wild card.

As far as our industry is concerned, there's always an impact. The short-term rate increase has been quickly baked in, and to be honest, I think the holiday season is hitting us at the absolute perfect time, because any time there's a rate increase, there's that pregnant pause. People will go home for the holidays and come back in January with a mindset that this might become more of the new normal. We've all been spoiled with the historically low rates that were never going to be sustainable at the level they've been at.

Long term, one thing I'm seeing and continuing to focus on is, what does liquidity look like? What are we hearing from the agencies, what are we hearing from the life companies, what are we hearing from the securitized world? While the securitized world is trying to get their own new normal, what you're seemingly hearing from everybody else is that the liquidity is still there. I haven't talked to a single lender that is cutting back the amount of dollars they want to get out in 2017. If anything, there has been a little nervousness about the pipeline potentially being a little quiet in the first quarter because of rate increases. There's probably some room in the spreads in terms of the rates being quoted today; if the pipelines do become a little quiet in Q1, you might see some spread compression from the various lender types. If the pipelines stay full, I don't think you'll see much compression.

The world's biggest mystery right now is what this new administration is going to do. It's certainly making it more interesting again.

GlobeSt.com: So the rate increase is just one piece of the puzzle, whereas in the buildup to the first increase in almost a decade last year, some people were giving it more weight than it warranted.

Katai: Right. And right now it does look as though we'll see those rate increases that they're talking about for next year. Part of the business for a company like ours is that when rates start going up, it's imperative that you become more creative. You probably have to start working a little harder when it comes to the capital stack. And there's a recalibration that has to occur, because as you know, everything in the real estate sector is return-driven.

An increase of 25 or 50 basis points creates that pause, but the rate has been so historically low that people can absorb that. The question will be how quickly investors can figure out what level of returns is acceptable. And hopefully we'll get the economic growth that pushes rents too.