Joint Trades Request Immediate Support of Commercial and Multifamily Mortgage Markets
March 24, 2020
The Real Estate Roundtable along with 12 other organizations wrote to the Federal Reserve, Treasury, and Federal Housing Finance Agency urging them to continue to take decisive steps to reestablish liquidity in the multifamily and commercial mortgage markets to stabilize asset prices and shore up the balance sheets of market participants.
The letter urges the agencies to act immediately to implement the following measures in order to avoid the negative loop created by a liquidity crisis in the CMBS market. The current liquidity crisis has the real potential of sharply reducing the continued flow of capital to commercial and multifamily real estate.
While the Fed has already announced the formation of TALF 2.0, the letter suggests that additional asset classes be eligible, especially those that were included in TALF during the Global Financial Crisis. Given the rapid pace of turmoil relative to the 2008 crisis, we suggest immediate action to provide liquidity to this integral sector. Two of the main recommendations include:
Expand the Term Asset-Backed Loan Facility (TALF) to prevent worsening capital-markets conditions.
Adjust terms of TALF 2.0 to recognize current market dynamics.
The Real Estate Roundtable continues to provide additional input and are eager to assist.