The commercial real estate industry has been trying to sort out, and lobby for, where things are going. Goldman Sachs said office markets, maybe the most rattled part of CRE, have bottomed. Price increases could also indicate the start of a bottom according to a CoStar report. Then again, private CRE funds are facing pressure from investors and Federal Reserve Chair Jerome Powell recently said the central bank is in no hurry to raise rates.

A recent take by S&P Global Ratings tries to work out some of the conflicts in views and conditions. Start with the negative side. Interest rates remain high compared to those since the Global Financial Crisis, making refinancing harder. Complicating that issue are lower asset valuations and debt service coverage ratios that have increased, so lenders face more risk.

S&P says all this will continue until the Fed starts cutting rates, and the firm doesn't expect that to start happening until December 2024. Even if that happens, cuts will likely be a quarter percentage point at a time at a pace to see how the changes affect the economy. Some sources have told over the last half year that a 25-or-50-basis-point isn't likely to be a big motivation to investors.

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