Rate Hike Pause and CRE
Commercial Observer
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The Federal Reserve board on Wednesday voted for the third consecutive month to hold its benchmark borrowing rate steady. What’s that mean for commercial real estate? A lot, especially in the new year. Also for today: A nearly $300 million building loan in Manhattan.
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— Tom Acitelli, Deputy Editor
Fed Presses Pause on Interest Rates Once Again to Close Out 2023
The Federal Reserve held short-term interest rates steady to close its 2023 calendar in a move that positions commercial real estate for a potential rebound in transaction volume next year, according to analysts. The central bank kept its benchmark interest rate unchanged at between 5.25 percent and 5.5 percent for a third straight meeting after bringing rates to their highest level in 22 years in July. The Fed previously increased rates in 11 of 12 meetings dating back to March 2022 when borrowing conditions were at near-zero levels in an effort to fight inflationary pressures. The Fed in its post-meeting statement indicated three interest rate cuts were on tap for 2024. It also said that inflation has "eased over the past year but remains elevated."
Rockrose Lands $293M Permanent Loan for Hudson Yards Resi Tower
Big loan closings are rarer than red diamonds these days, but one deal is bringing the shine this December — and it involves a different kind of Rock. An affiliate of Rockrose Development just sealed a $293 million permanent loan for Lyra, a 51-story, 590-unit apartment building at 555 West 38th Street, Commercial Observer can first report. Wells Fargo was the Delegated Underwriting and Servicing (DUS) lender for the five-year, fixed-rate Fannie Mae loan, while Avison Young’s Andrew “Andy” Singer, Scott Singer and Kathleen McSharry led the firm’s tri-state debt and equity finance team in negotiating the loan on behalf of the borrower.
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