Jaime Sturgis, CEO of Native Realty, shared insights with The Real Deal about the anticipated rate cuts by the Federal Reserve and the potential impact on South Florida real estate. The article highlights the optimism among brokers about the positive effects and their potential to enhance confidence in the market.
Sturgis notes that this growing confidence is already translating into more favorable terms, and he anticipates this trend to persist into the coming year. However, certain asset classes, particularly office and multifamily, may face disproportionate challenges.
Sturgis acknowledges the likelihood of pain and distress in these markets, stating, “There will be pain and distress in that market, no question about it.” He points out that some multifamily landlords and developers were operating on narrow profit margins, and even slight variations in the model could lead to significant challenges.
Reflecting on the past year, Sturgis emphasizes that the series of rate hikes in 2023 had a freezing effect on everything, making it a tough year for deal flow and investment sales. He mentions that a substantial amount of cash designated for distress has been on the sidelines, and there is a collective hope for the talked-about “soft landing.” However, the severity of the impact remains uncertain.
Sturgis, along with others, expresses the desire for a return of capital to the market in a more traditional manner. He states, “Maybe some of that capital comes back into the market in more of a traditional fashion.”