For more than seven months in 2024, the commercial real estate investment market remained on a sluggish path. High interest rates continued to not only challenge many asset owners who needed refinancing, but also buyers and sellers looking to make deals. For instance, some $174.7 billion in property investment sales during the first half of the year was 7 percent below a year earlier, according to MSCI Real Assets. In such uncertain times, it’s not unusual for the commercial real estate market to experience bouts of bifurcation. Typically, those are marked by trends such as rising demand for higher quality offices during economic slumps when tenants can fetch discounted rents. Early in the recovery phase, it’s not unusual for investment to flow into tech-oriented metros at the expense of other cities. The Federal Reserve’s aggressive hike of the federal funds rate has created another category of bifurcation, especially as it relates to floating-rate bridge debt and how lenders are managing their loan portfolios. That is, the difference between the performance of assets depending on when owners financed the properties, says Jeff Salladin, a managing director with Dallas-based private debt fund Revere Capital. “It’s a question of vintage,” he explains. “Loans …
