On this episode of Bisnow Reports, we sit down with Kevin Fagan, the head of CRE economic analysis at Moody’s Analytics, to hear his thoughts on the Federal Reserve’s approach to interest rates going forward, the outlook for the commercial mortgage-backed securities market, how much exposure real estate has to regional banks and the former Signature Bank's $11B in multifamily loans that have yet to find a buyer.

Although he said the real estate market will experience some pain and distress, he stressed it is worth remembering the credit conditions are far better than they have been in previous downturns.

“It’s a boom-bust sector,” he said on the episode. “It’s very pro-cyclical, and it moves with the economy. It’s the physical manifestation of the economy, and as the economy goes, so does commercial real estate. Let’s say we had the exact same thing [that] happened in 2008 happen now: There was contagion all over the place, all the levers of liquidity stopped being available, and in CMBS, we had a 10% default rate. … You could very much argue it would be better this time around if we had the exact same contagion happen now because you just have better metrics.”

Bisnow's audio series, Bisnow Reports, examines every facet of the international commercial real estate industry — from the murky future of retail and office to real estate’s reckoning with diversity to the effects of climate change on the built world, and so much more. You can subscribe on iTunes, Spotify and Amazon Music, or scroll down to listen in your browser.