But some HRE veterans say the impact of the long-awaited move will be gradual
By John B. Mugford
During a Sept. 18, 2024, news conference, Federal Reserve Chairman Jerome Powell discussed the Fed’s decision to reduce the fed funds rates half a percentage point. It was the first rate cut since the Fed began raising interest rates in early 2020. (Photo courtesy of the Federal Reserve)
In making the first cut to the federal funds rate since it began raising rates in early 2020, has the U.S. Federal Reserve Bank ushered in a period of increased medical outpatient building (MOB) sales? Will last Wednesday’s rate reduction result in a return to the pre-pandemic heyday of MOB investment, perhaps rivaling the record-setting sales volume of 2022?
Let’s not get ahead of ourselves.
Although all the healthcare real estate (HRE) veterans we have spoken with since the Sept. 18 announcement say they certainly welcome the Fed’s 50 basis point (bps) rate cut, their enthusiasm is muted, at least in terms of the near-term impact on transaction activity for MOBs and perhaps other healthcare-related property types.
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