Restoring Liquidity in CRE Markets and Protecting Capital Formation

Over $1.5 trillion of commercial real estate loans are maturing in 2023, 2024, and 2025, the bulk of which were financed when base rates were near zero. They now require refinancing in an environment where rates are much higher and commercial real estate markets face economic pressures from employees’ lingering reluctance to return to the office and new needs for space in the post-pandemic landscape. To address this wave of maturing commercial real estate debt, market liquidity must be restored and borrowers’ ability to raise capital in this challenging economic environment must be preserved.

Position

The Roundtable calls for federal regulators to grant flexibility to borrowers who are restructuring loans and transitioning the ownership and financing of assets from a period of low rates and robust markets to a time of higher rates, declining credit capacity, and uncertain economic growth.  

The Roundtable has also opposed proposed rules from the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) that could have unintended and unnecessary consequences such as impeding real estate capital formation, undercutting economic growth, and weakening the strength and stability of U.S. real estate capital markets.

Background

The Roundtable continues to engage policymakers on the importance of maintaining liquidity and robust capital formation.   Regarding opposition to new proposals:

  • The Real Estate Roundtable submitted comments to the Securities and Exchange Commission (SEC)  raising concerns  about proposed rules – Private Funds Advisers and Amendments to Form PF—  that would impose burdensome new reporting requirements on the private fund industry — a key capital source for incoming-producing real estate (Roundtable Weekly, March 25, 2022). The new rules, since approved by the SEC, could negatively impact real estate capital formation and liquidity.

For more information and recent updates, reference our resources below.

Resources

MORE ISSUES
MORE ISSUES
Restoring Liquidity in CRE Markets and Protecting Capital Formation
Halting Pro-Cyclical Policy Measures and Increases in Regulatory Capital
Restrictions on Foreign Investment in U.S. Real Estate
Beneficial Ownership & the Corporate Transparency Act
Commercial Insurance Coverage: Pandemic Risks & Natural Catastrophes
SAFE Banking Act: Financial Services for Legal Cannabis-Related Businesses (CRBs)