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The Bisnow Weekender: Welcome To Interest Rate Purgatory

Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond. 

Purgatory isn’t such a bad thing. 

There is a light somewhere at the end of the tunnel, but to get there — to see those first celestial glimmers — you have to go through a period of unfathomable pain and darkness.

Only God knows how long that process will take. In commercial real estate’s case, their higher power is Federal Reserve Chairman Jerome Powell, who, at some point they hope, will flick the first domino that will kick the multitrillion-dollar industry back into high gear, instituting the first interest rate cut since March 2020.

Last week, there was good reason to be optimistic. All of the metrics that matter to the Fed in its decision were there for everyone to see. The American economy has been "extraordinary,” growing by leaps and bounds compared to every other nation on the planet. The unemployment rate has been flirting with historic lows. And most critically, it seemed like U.S. inflation was finally beginning to cool.

Faint optimism began to creep into the collective CRE mind in recent weeks and behind the scenes, and off the record, my sources across the country had begun to smack their lips. The time to activate dry powder was nearing, they told me, and Monday’s news that Blackstone was making a massive $10B multifamily play was seen by many as a shot heard 'round the commercial real estate world. Perhaps it was the beginning of something. 

But on Wednesday, the light faded. The U.S. consumer price index arrived and showed a grim 0.4% rise, meaning inflation hit 3.5%, well above the Fed’s 2% target that might unlock an interest rate cut. 


The Dow plunged 400 points on the news, and the reaction from real estate watchers and players were equal parts somber and furious as they anticipated what this probably means for a “survival” year that was predicted to carry multiple rate cutsand at least one by now.

It's a parlor game for financiers and power players to beat up on the Fed, especially in rough economic periods, and this moment is no exception. 

There were a lot of loud voices this week and you probably heard them, but many Wall Street gazers begrudgingly acquiesced to the moment, admitting defeat that the Fed would cut rates in June, or any at all this year. In an email this week, Peachtree Group CEO Greg Friedman seemed to follow suit.

“There is a heightened likelihood that the Fed may postpone its first interest rate cut longer than anticipated, further dimming the outlook for multiple rate cuts this year," he said.

In fact, part of what is driving the Fed’s perceived lethargy is history. It doesn’t want to repeat the mistakes of the past, which, if ignored, could exact an even heavier toll on the economy.

“The risks of allowing inflation to persist still far outweighs the risk of triggering a recession,” Mark Higgins, senior vice president at Index Fund Advisors, recently told CNBC. “[The Fed’s] failure to do this in the late 1960s is one of the major factors that allowed inflation to become entrenched in the 1970s.” 

There is more than 1B SF of available office space in America right now. The European Central Bank isn’t adjusting its own rates and, because of that, Europe’s most important bank, the Bank of England, likely will not enact what was predicted to be six cuts this year, but now only two.

Oh, and the beleaguered banking sector will report their earnings next week, where their leaders will surely have something to say about the news of this week and how it will affect their ability to fund costs and hold, or not continue to hold, its mammoth commercial real estate loans.

So, welcome to purgatory. We’re going to be here for a little while longer — a hell of sorts, but the kind that hopefully ends well. 

— Mark F. Bonner, Bisnow Editor-in-Chief


The Best Of Bisnow News: April 8-12

Blackstone's $10B Multifamily Buy Could Be A Starting Gun For Investors — Atlanta Reporter Jarred Schenke

Blackstone announced Monday that it has agreed to buy publicly traded apartment owner AIR Communities for $10B, signaling it is ready to go back on offense after one of the slowest years for commercial real estate sales of the century.

The purchase also sent a signal that now is a good time to buy multifamily assets, and investors flush with freshly raised cash could start to pounce with the belief that apartment values have reached a bottom.

“Anytime the largest buyer of apartments makes a huge move like that, I think there will be a little bit of groupthink behind it,” said David Moore, CEO of Dallas-based apartment investor Knightvest Capital. “Are we just going to sit around and watch Blackstone buy everything?” 

Blackstone is taking private AIR’s 76 rental communities, which are concentrated in major markets such as Washington, D.C., Atlanta, Miami, Philadelphia and Los Angeles. Blackstone said it would invest another $400M to beef up the portfolio.

News of the deal sent stock prices of other multifamily REITs up about 4%, the largest single-day jump since December.


Available U.S. Office Space Tops 1B SF For First Time — National Reporter Dees Stribling

Overall available office space in the U.S. reached a new high-water mark in the first quarter, topping 1.2B SF, according to new data from Avison Young. 

Representing 23.7% of the office inventory in the country, that number consists of direct and sublease availabilities and is likely the highest on record, by Avison Young's count.

There were slumps in office leasing activity in the aftermath of the dot-com bubble and the Global Financial Crisis, but they weren't as pronounced as today's and were entirely different, according to AY U.S. President Harry Klaff.

“Even though we were in recessions, there wasn't a functional change in how people were using office space,” Klaff said. 


‘Who The Hell Am I?’ Top Malls Are Back, But Ongoing Identity Crisis Threatens To Pull Others Under — Chicago Reporter Ryan Wangman

The nation’s top class of malls has caught its breath and found itself again after a well-documented identity crisis that saw consumers shift purchases from brick-and-mortar buys to clicks and keystrokes on computers and phones. A new report shows that consumers are flocking back to those centers, lifting overall mall foot traffic to its highest level since the pandemic began.

Yet some of that has come at the cost of hundreds of other formerly hopping centers failing to remake their business models, either closing outright or barely holding on, and clearing the field. And even for those owners that have remade their images and refilled their rosters, looming debt maturities could threaten fragile victory as retail income streams grow more diverse and less predictable. 

“Amidst the ‘demise of the mall’ narrative that dominated so strongly pre-pandemic, we need to tip our cap to these top-tier mall owners who have made really, really smart decisions, saw where the winds were shifting and were able to align really well,” said Ethan Chernofsky, senior vice president of marketing at analytics firm, which released a report late last month showing visits to shopping centers were only 2.3% lower than they had been in 2019, the smallest gap since the onset of the pandemic.

More Big News From The Week …

Apple Signs 42K SF Deal For New Office Space In Miami

‘You Can’t Lease Them Anyway’: The Most Common Affordable NYC Apartments Struggle To Find Tenants

Restaurateurs Are ‘Circling The Market Like Vultures’ In Sun Belt Cities Where Space Is Scarce

Burdened By Layoffs And Uncertainty, Tech Leasing To Remain Depressed

Multifamily Construction Snafu Leads To Emergency Demolition Of Longtime Family Home

Costco Buys Dallas Office Building Out Of Bankruptcy, Plans Multimillion-Dollar Rehab

Affordable Housing Developers Face Growing Funding Gaps, But They See A New Way To Fill Them 

My Slightly On/Off-Topic Media Diet

European Central Bank Gives Strong Signal That Cuts Are On The Way Despite Fed Uncertainty (CNBC): “In a statement, the institution said, ‘it would be appropriate to reduce the current level of monetary policy restriction’ if inflation continues to move toward its 2% target. ‘We are not assuming that what happens in the euro area will be the mirror of what happens in the United States,’ [ECB President Christine] Lagarde said, following speculation about the impact of a hot U.S. inflation print on the Federal Reserve’s policy.”

Traders Scale Back Bets To Two BoE Rate Cuts This Year (FT): “Traders are no longer fully pricing in the first UK interest rate cut in August and now expect borrowing costs to begin to fall in either that month or September. The two cuts they now expect for this year … contrast with the more than six cuts markets anticipated in January.”

Global Economy Faces Decade Of Weak Growth, Warns IMF Chief (FT): “‘The sobering reality is global activity is weak by historical standards and prospects for growth have been slowing since the global financial crisis,’ IMG managing director Kristalina Georgieva said, explaining that ‘inflation is not fully defeated, fiscal buffers have been depleted and debt is up, posing a major challenge to public finances in many countries.’”

Billionaire Steve Cohen Sees Four-Day Work Week Coming (Bloomberg): “‘My belief is that a four-day work week is coming,’ [Steve] Cohen, the founder of Point72 Asset Management and owner of the New York Mets, said in his first-ever interview on CNBC. ‘That fits into a theme of more leisure for people.’ … However, Cohen said he’d keep his own traders and portfolio managers working five days a week. ‘Taking off Friday when you have a portfolio — that would be a problem.’” 

We’re Working Less On Fridays Than We Used To, And That’s OK (WSJ): “None of this makes Luke Liu, founder and chief executive of Albert, an interactive learning platform for grades 5-12, lose sleep over his all-remote staff’s productivity. He moved to a half-day Friday policy in 2022 to alleviate worker burnout, reasoning that Friday afternoons were the least productive part of the week anyway. ‘On paper, it’s a 10% loss of time,’ he says. ‘In reality, it’s a 2% to 5% loss.’”

RELATED: Bernie Sanders Introduces Legislation to Enact a 32-Hour Workweek With No Loss in Pay (Bernie Sanders): “Today, American workers are over 400% more productive than they were in the 1940s. And yet, millions of Americans are working longer hours for lower wages than they were decades ago. That has got to change. … It is time for a 32-hour workweek with no loss in pay.”

NCAA Women Beat Men in Finals’ Ratings for First Time — But Got 99% Less TV Money (WSJ): “But that won’t be reflected in the money each side earned for TV rights: $6.5 million for the women’s tournament and $873 million for the men’s. The wide discrepancy raises the question of whether college athletics officials have failed to capitalize on a surge in popularity in the women’s game. A new deal that goes into effect next season will allocate some $65 million a year for the women’s game, a substantial jump but still a fraction of the men’s haul.”

A Soccer Team Stopped Charging for Tickets. Should Others Do the Same? (NYT): “‘Our average attendance has gone from 27,000 to 33,000,’ said Alexander Jobst, the [Paris F.C.’s] chief executive. ‘Our merchandise sales are up by 50 percent. Our sponsorship revenue is up 50 percent. We have reached a record number of club members.’” 

Bisnow Weekend Interview Preview

Lauren Gilchrist likens her rise up the ranks to knowing how to quarterback, running the right routes for each play and passing the ball when necessary. After a start in Washington D.C.’s public sector, Gilchrist jumped into Philadelphia commercial real estate, working to marry what she calls “two very different conversations” about real estate and assembling an all-star team aimed at charting the city’s future. 

Newmark’s new Philadelphia market leader sat down with Bisnow Philadelphia Reporter Sonya Swink to discuss what people don’t appreciate about Philly, how Newmark is navigating a difficult year, and the offensive and defensive moves it will take to get through it. 

Bisnow: Was there ever an ‘aha’ moment for you where you realized this was going to be your life's work?

Gilchrist: Part of what attracted me to the industry was I found that the public sector and the private sector were having two very different conversations about real estate. The public sector has its goals and aspirations for growth and safety and economic development. And the private sector speaks a very different series of languages around cap rates and price-per-SF and operating costs and return. 

I really wanted to get into this side of the business because I thought it would provide me with vocabulary that would help me understand, and then help people in the public understand, what the realities were of the business of real estate. Because we all co-create this environment together, whether it's through policy or the actual construction of buildings. I really have often felt like there's a disconnect in the two conversations and felt that I could hopefully be a bridge across the two.

The Weekend Interview goes live every Friday evening — head to over the weekend to check it out!

Jobs! Jobs! Jobs!

Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at 

Chief Financial Officer Lead financial operations for a Beverly Hills, family-owned, real estate investment company

Vice President, Property Operations Oversee the operational and financial performance of a portfolio of multifamily and mixed-use properties

Managing Director Oversee the planning and execution of Harvard's project portfolio, project delivery standards, controls, and resources

Head of Virginia Tech Real Estate Department Lead a growing department with a strong national reputation. 

Hey, Sasha, What Are You Going To Binge This Weekend?

It looks like another rainy weekend here in New York City so it’ll be a great opportunity to binge. I’m a big 90 Day Fiancé fan so I’m getting caught up with all the ridiculous drama. I’m also on a kick to read the greats that I’ve missed. I’m currently on Joan Didion’s Slouching Towards Bethlehem. Maybe it’ll serve as inspiration for my writing workshop, where me and my friends work on personal creative writing projects. That’s Sunday. And I’ll likely get to some spring cleaning somewhere in there.

 — Sasha Jones, New York Reporter 

Upcoming Bisnow Events And Webinars

Tuesday, April 16 (San Francisco): Bay Area ESG & Sustainability Summit

Tuesday, April 16 (Minneapolis): Twin Cities State of the Market and Cocktail

Wednesday, April 17 (Arlington, VA): Future of Arlington County: Exploring National Landing, Rosslyn, Ballston And Clarendon

Wednesday, April 17 (Dallas): The Future of Dallas Healthcare Real Estate

Thursday, April 18 (NYC): New York Hotel & Hospitality Event

Thursday, April 18 (London): UK Real Estate Outlook: Mid-Market Review and Latest Trends

Thursday, April 18 (San Diego): Southern California Life Sciences Conference


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