Market Waiting for Fed To Begin Tapering, Then Deals Will Pick Up Pace

<p>The commercial real estate market is experiencing an extended slow down until the Fed pulls back on its quantitative easing strategy.</p> <p>In the current market, the advice from Thirty Capital is that investors have to wait out the range-bound market until the Fed makes its moves. After that, the CRE market will pick up pace.</p> <p>Analyst Jason Kelley says “Everyone's waiting for the Fed to crack and for tapering to start. We're in that little bit of lull before there's movement. But once that movement comes, it'll move pretty fast.”</p> <p>IS INFLATION A LONGER TERM ISSUE?</p> <p>Despite Thirty Capital’s observations about inflation in previous episodes, it appears the Fed doesn’t view inflation as a longer term concern.</p> <p>Notes analyst Bryan Kern: “The Fed has stated it believes inflation at the moment is transitory. They're probably more focused on employment right now.”</p> <p>Next week will see the employment report issued. This week, reports due are new home sales, consumer confidence, and GDP. From this perspective, there’s not a lot of news that will impact the markets significantly, unless there are significant changes in weekly jobless claims numbers.</p> <p>Adds Bryan: “I expect we’ll remain range-bound until maybe as late as the third quarter. It just depends on when the Fed starts whispering taper.”</p> <p>CRE DEALS MOVING SLOWLY</p> <p>Thirty Capital is starting to see some deals come through, but they are really one-off deals.</p> <p>Analyst Jeff Lee says: “We're starting to see some deals open up and trickle in. We're definitely quoting some here and there. But it's still a lot of  investor demand. And that drives BP sentiments, too.</p> <p>“Some of the lenders and originators that we talked to are still saying: ‘Yeah, there are sweetheart deals out there that make tons of sense. They have a T-36, strong financials, good fundamentals, everything, but they just can't get past the B buyer.</p> <p>“Once the first couple of deals have been up, and the optics for contributing more of these