WASHINGTON, DC-There was a time when executives from all sectors of the economy would watch with baited breath to see what the Federal Reserve Bank would do with interest rates. This, of course, was before the federal funds rate was effectively lowered to zero last year in response to the global financial free fall the world suddenly was in.

At their most recent two-day meeting, which ended Wednesday, Fed policy makers opted to keep interest rates where they were. That was not surprising; this time, though, Fed watchers waited to see what signals would be sent regarding the Fed’s exist strategy from its unprecedented and aggressive reach into the economy.

Small signs are there that the Fed will be disengaging, albeit slowly. It has said it will slow the pace of the program to buy $300 billion in US Treasuries for example. By October, it said, it anticipates the full amount will be purchased, one month later than the program was scheduled to end. Left in place, and not extended beyond the end of this year, is the cornerstone of the Fed’s plan to stabilize the markets. That is, its purchase of $1.25 trillion of GSE mortgage-backed securities and $200 billion of agency debt.

With the Fed showing little signs of extending its economic rescue program beyond 2009, an analysis of where the commercial real estate industry is right now and will likely be by the end of the year is in order.

For starters, the industry cannot look to assistance from the Fed even if the bank authority was inclined to extend itself further, according to Aaron Moskowitz, a business planning for commercial property companies, based in Los Angeles.

The Fed will not be bailing out any more companies, because it cannot, he tells GlobeSt.com. “Nobody can explain what happened with AIG and Goldman Sachs, but our borrowing capacity through the Fed has now hit a brick wall. Other countries are implementing programs to offset their losses on possessing dollars, and there is no room for the Fed to budge, except through continued lowering of interest rates.”

And the level of interest rates has become almost meaningless to borrowers who are seeking to refinance, the immediate crisis in the industry right now.

Even if liquidity were available, “we are currently in a situation where commercial valuations are being based more on historical rent histories rather than the more speculative 12 months pro-forma method,” Moskowitz says. “This is creating a significant effect within the commercial lending industry as the banks are seeing values fluctuate significantly and interest rates become less significant then vacancies realized within current bank and fund portfolios.”

Unfortunately the consensus among the majority in the commercial real estate community is the government programs, including the Fed’s actions, have not addressed their particular crisis.

The Fed has noted that the economy is beginning to stabilize or level out as the most recent statement from the Federal Open Market Committee said. “Conditions in financial markets have improved further in recent weeks,” it read.

However that stability is not translating into more active lending.

It is a little to early to see signs of stabilization in the commercial real estate market in a climate where commercial real estate values continue to decline, access to financing, particularly for larger transactions, is very limited, and loan defaults are rising at an increasing rate, Eugene Balshem, a partner with Stroock, tells GlobeSt.com.

“This will continue to be an issue as more and more commercial real estate loans, in particular, CMBS loans, mature this year and next.”

It may be that the programs put in place will just take longer for the CRE industry to see their effect, Shawn Howton, director of the Daniel DiLella Center for Real Estate at the Villanova School of Business, tells GlobeSt.com.

“The CRE market generally lags the rest of the economy so if we see improvement in the broader economy by the fourth quarter this year or early in 2010, it will take a few quarters for that improvement to work its way into the CRE market.”

There will be pockets of stability around the country as CRE is largely a local or regional market, he predicted, with retail leading out first then followed by the office sector as unemployment lessens. But the broad trend in CRE is not positive in the near term and a little brighter in the intermediate term depending on economic activity, he concludes.

If stabilization is supposed to be a reflection of lending activity, then no, we are not stabilizing, says Steven Pepper, partner with Arnall Golden Gregory in Atlanta. “There is no lending on a day to day basis unless the sponsor has put in a significant amount of equity,” he tells GlobeSt.com.

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