By Taylor Williams For the last several years, as COVID-19, inflation and interest rate hikes have chronologically rocked the commercial real estate industry, the term “dry powder” has increasingly factored into investment discussions. While the term generally refers to cash or capital that is parked on the sidelines, 2024 could well be the year for its deployment. There are several basic reasons for endorsing this notion. First, at its December meeting, the Federal Reserve signaled that it would cut rates three times this year, which should theoretically make debt financing more accessible and less expensive — though the extent of that depends on the magnitude of the reductions. Second, as evidenced by the stock market tear following that announcement, investors are itching to deploy capital and will rally around just about any reason to do so, proven or not. Third, there is roughly $537 billion in commercial real estate loans that will mature next year, according to New York City-based Trepp. This staggering volume of impending maturities in a high-interest-rate environment all but assures that some assets will be forced into sales, whether by owners pre-default or lenders post-default. And finally, the 10-year Treasury yield — the benchmark rate against …
