GLED012 - Fed Easing Setup - CMBS Maturity Wall, Cap Rates Hold, SWFs Pivot

- Fed Watch: 92% probability of a 25 bps cut at the September 16–17 FOMC. 10-year UST ~4.04% near a five-month low; 5-year ~3.61%. Bank CRE rates ~5.70–6.22%; agency ~4.91–5.15%. - CMBS: Delinquency 7.29%; office ~11.7%. H1 2025 issuance at post-GFC highs, ~74–75% SASB. ~$150.9B 2025 maturity wall; ~23% office exposure. - Cap Rates: Stabilization continues. Industrial ~5.0%; Multifamily Class A ~4.74%; Office Class A ~8.4%; Data centers ~5.8%. - SWFs & Pensions: SWFs trimming direct real estate (~7.3%) while lifting infra (~8.1%) and private credit/real estate debt. Pension funds increasing REIT usage to 70% (2025). - Sectors: Office vacancy ~14.2% with flight-to-quality (NYC, DFW, Austin, Nashville, Miami). Industrial vacancy ~7.12% with 3PLs ~35% of leasing. Multifamily rent growth 1.5–2.6% for 2025; construction starts rolling over. Retail vacancy at 20-year lows; Miami ~2.8%. Positioning - Debt: Lock favorable coupons into the cut window; prioritize SASB-quality collateral. - Equity: Industrial/logistics and data centers for durable cash flows; selective Class A office only in absorption-positive submarkets; retail neighborhood centers with tight supply. - Capital Programs: Increase allocation to real estate debt strategies; stage dry powder for Q4–Q1 bid-ask normalization. Contact: [email protected]