SAN DIEGO—If anyone should understand how the cost money and interest rates affect commercial real estate, it would be Roger Ferguson, who was the vice chairman of the Federal Reserve's Board of Governors from 1999 to 2006 and the former CEO of TIAA. So when he told the audience at MBA Commercial/Multifamily Finance Convention and Expo here in San Diego that the CRE industry would have to get used to a new normal in interest rates, it took note.
Ferguson explained that he doesn't expect the US to return to a place of deflation which drives negative rates. "I think we are going to see a return to the kinds of interest rates where they are around 5%,6%,7%, not the 12% that our parents had to deal with. Flat rates weren't the norm. Money should not be free and we are getting back to that."
The Fed, in short, will continue to raise rates, he said. "What I see is very much what everyone sees…The Fed has been taking action and that is certain."
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Other dynamics affecting the industry, though, are less certain, he noted, such as "what is happening in terms of office and housing and people going back to work after the pandemic." Some things, though, remain familiar. What is driving the multifamily space is demographics and the aging population, he explained. "There is also the question of the broader trend to new family creation," he added.
Earlier in the day, the Mortgage Bankers Association awarded Chris LaBianca, Managing Director at UBS Real Estate Finance, with the 2023 Commercial Real Estate Finance Distinguished Service Award. "Chris has demonstrated his unwavering commitment and leadership to MBA and the commercial real estate finance industry throughout his illustrious career," said Matt Rocco, MBA 2023 Chairman and President of Colliers Mortgage.
Rocco added that "By serving in MBA leadership roles on several councils and committees, Chris has been a leading voice and strong advocate for many top industry issues. I am thrilled to see his efforts recognized by his peers with this prestigious award."
Check back with GlobeSt.com for more stories from the MBA CREF23 conference.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
