This week the Federal Reserve elected to maintain interest rates at 0 to .25% and pledged to provide the economy “the support it needs for as long as it takes.” That support includes continual sizeable asset purchases to the tune of $80 billion per month of Treasury securities and $40 billion per month of agency MBS. This most-recent interest rate guidance, along with the coming balance sheet increases, are intended to materially ease financial conditions and provide substantial economic support, according to Chairman Jerome Powell.

Powell thanked the swift and forceful action by Congress and the Fed. He reiterated the Fed’s commitment to achieving its monetary goals of maximum employment and price stability and pledged the Fed would “use its full range of tools to provide relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.”

The decision comes after trillions of dollars were infused into the economy as stimulus over the past year, starting with $2.2 trillion for the CARES Act in March, another $900 billion economic stimulus in December and the most recent $1.9 trillion passed this month by the Biden administration. Additional progress towards economic stability is being made as President Biden recently predicted that the national vaccine ramp-up could make a return to normalcy possible by July 4.

More than 3 million vaccine doses have already been administered to New Yorkers, per city data. Declining covid rates and an accelerating vaccine rollout bodes well for a robust New York City recovery over the coming year. Right now, companies and landlords are working together to bring employees back into the office by redesigning their spaces to foster wellness and collaboration in the age of social distancing. Employees are signaling they would be comfortable working more regularly within offices via hybrid or staggered schedules. By September, office buildings are expected to be much more full.

With restrictions being lifted on indoor gatherings, including dining, concerts and sports venues, the city is returning to the jewel that it was before the pandemic. Indoor dining is slated to rise to 50% capacity today, March 19. The future is bright for New York City commercial real estate investment and there is great opportunity on the market now.

“The positive trajectory of multifamily sales and apartment leasing this past quarter has made lenders more comfortable in underwriting these assets. Additionally, we are seeing lenders start to reduce their Covid reserve requirements,” said Ahron Sussman, director of capital services at Ariel Property Advisors.

Strengthening fundamentals and demand point to a more active multifamily sales pipeline in the year ahead and acquisition financing will see an uptick as a result, Sussman said, adding “a warming market tends to fuel itself.”

For future decisions on the interest-rate trajectory, Chairman Powell’s assertion that the Federal Reserve will wait to act on real data, rather than forecasted performance, should further reduce concerns for investors by providing tangible and quantifiable guidance.

“Let’s not forget, some of the world’s biggest companies are doubling down on New York City commercial real estate despite a pandemic,” said Sussman. “The future is bright for New York City as a technology and innovation capital.” Sussman pointed to voracious leasing activity by TAMI tenants, which accounted for one-third of the 13 million square feet of office leasing signed in 2020. Half of that activity was driven by leasing commitments from Apple, Amazon, TikTok and Facebook, which leased the entirety of office space at the Farley station.

And just this week, Google announced it would make an additional $7 billion investment into real estate nationally in 2021, specifically mentioning New York City as a place it would add thousands of new jobs.

Meanwhile, investors are taking notice of the modest jump in the 10-Year Treasury rate spread over the past quarter. For instance, the 10-Year Treasury rate was .68% on Oct. 1, compared to 1.63% on March 17. This development should motivate investors to expedite their acquisitions or to review their current portfolio to lock in favorable financing before spreads increase further. With all of these signs pointing to an economy in recovery, this month’s address by the FOMC carries significant implications for commercial real estate investors. With trillions in liquidity in the market, the Fed anchoring interest rates near zero and the PCE inflation rate forecast to stay below 2.5% for the near future, there’s a light at the end of the tunnel for buyers and financiers alike. After all, increased comfort, stability and certainty are all welcome attributes when it comes to real property investments. Overall, the guidance released by Chairman Powell and the FOMC could instill the confidence needed to jumpstart activity within New York City’s commercial real estate market.