Commercial Observer: Fed Holds Interest Rates Amid Trump Tariff Uncertainty
- Parkview Financial
- May 7
- 4 min read
By Andrew Coen | Commercial Observer | May 7, 2024
In a recent discussion with Commercial Observer, Paul Rahimian, Founder and CEO of Parkview Financial, shares insights on how high interest rates are impacting commercial real estate. He discusses Parkview’s strategic response, including over $500M in loan payoffs in Q4 2024, and how the company is navigating market uncertainty to protect investor capital.
Read the full article below, originally published by Commercial Observer.
In its first meeting since President Donald Trump’s April 2 “Liberation Day” tariff announcement, the Federal Reserve held firm with interest rates while acknowledging increasing volatile economic conditions.
For a third straight meeting, the central bank held the benchmark interest rate at between 4.25 percent and 4.5 percent in a widely expected move as it faced mounting market uncertainty about future inflation risks posed by Trump’s tariff policy. The Fed also continued to stress the balancing act of its dual mandate of low unemployment and low inflation.
“The tariff increases announced so far have been significantly larger than anticipated,” Fed Chairman Jerome Powell said in a post-meeting press conference. “If the large increases in tariffs that have been announced are sustained they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment.”
Powell said the Fed is “well positioned wait for greater clarity” before deciding whether to adjust its monetary policy. His decision Wednesday came three weeks after President Trump said the Fed chair’s “‘termination cannot come fast enough” before later deciding to back off on trying to fire him before Powell’s term as Fed chair ends in January.
When asked whether maintaining stable employment or stable prices was more important from a policy perspective, Powell said, “It’s too early to know that.”
The Fed’s pausing of interest rates in its first three meetings of 2025 follows its decision to slash interest rates 100 basis points in the final three meetings of 2024. The central bank had taken a hawkish stance due to inflationary pressures, with 11 rate hikes out of 12 meetings between March 2022 and July 2023, before then holding rates steady over the following year.
Jay Neveloff, chair of law firm Kramer Levin’s real estate practice, said he expects commercial real estate transactions to proceed in 2025 regardless of whether interest rates trend down in the ensuing months, given how many outstanding loans are nearing maturity.
“Lenders have matured loans and defaulted loans, and the question is what they are going to do with them,” Neveloff said. “[Owner and Equity] investors are done and they want the money back and they want to redeploy their money so they’ll sell at a loss or they’ll recapitalize and be deeply subordinated into the capital stack.”
Neveloff added that some lenders should set up infrastructure to take back properties rather than sell the loans, noting he represented a bank during the Global Financial Crisis of 2008 that used this strategy and successfully sold the property after holding for 10 years when values rose. He said some office buildings may face challenges with this route because of capital requirements needed, but expects those valuations to also increase over time since the market is at a bottoming-out period.
Paul Rahimian, CEO and founder of Parkview Financial, said he decided in the middle of 2024 to get more aggressive pursuing legal remedies with borrowers in the belief that interest rates were not going to come to levels many in the CRE industry were hoping for. That strategy has continued in 2025 amid more defaults and foreclosure actions in the past 12 months than in the private lender’s 16-year history, according to Rahimian, resulting in over $500 million of payoffs in the 2024 fourth quarter alone.
“This has allowed capital to flow more freely,” Rahimian said. “It’s not the best outcome for a lot of borrowers, and we understand that and we’re cognizant of that, but we also have to do right by our investors, and that might mean being more aggressive.”
The prolonged elevated interest rate has resulted in a number of CRE borrowers and lenders exploring alternative funding strategies, according to Michel Nevo, CEO of Leader Global, who has led bond offerings for companies like Silverstein Properties and Greystone on the Tel Aviv Stock Exchange in the last couple of years.
Nevo noted that in 2024 alone, roughly 30 percent of senior secured bond offerings and 70 percent of unsecured bond offerings in the Israeli bond market derived from U.S. real estate companies. Global issuers’ bond volume in the Israeli bond market was at $2.4 billion in 2024, more than double the previous year, according to Nevo.
“With a slower pace of U.S. interest rate cuts, many CRE borrowers and lenders are re-evaluating their funding strategies,” Nevo said. “ The ‘higher for longer’ environment is driving sponsors to explore alternative sources of capital, including markets outside traditional U.S. lending channels.”
Andrew Coen
ABOUT PARKVIEW FINANCIAL
Parkview Financial is a direct private lender specializing in commercial and residential real estate financing. Parkview provides short-term bridge and construction loans secured by first trust deeds to sponsors throughout major markets in the United States. Since inception, Parkview has successfully executed more than $4 billion in financing for multifamily, retail, office, industrial and mixed-use projects with executed loans ranging from $5 million to $300 million.
Headquartered in Los Angeles and with offices in New York and Las Vegas, Parkview has grown exponentially since it was founded in 2009 by CEO Paul Rahimian. Parkview has earned an unparalleled reputation within the commercial real estate industry as one of the most respected private lenders in the nation. This has been accomplished through Parkview’s proven ability to provide fast, creative financing solutions to borrowers who need certainty of execution. Fortified with an experienced team of in-house experts, Parkview is able to be nimble and creative even when it comes to some of the most challenging projects.
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