In his prepared remarks, Fed Chair Jerome Powell said that although economic indicators since the January meeting came in stronger than expected, interest rate discussions at the two-day meeting were influenced by the recent volatility in the banking sector, including the closing of Silicon Valley Bank and Signature Bank.

“We believe…that events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes,” he said. “It is too soon to determine the extent of these effects and therefore too soon to tell how monetary policy should respond. As a result, we no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation; instead, we now anticipate that some additional policy firming may be appropriate.”

Senior Director Matt Dzbanek said the recent bank closures have been top of mind for investors and that he and his team have been fielding calls from clients and reaching out to lenders.

“It’s understandable that clients have questions regarding the state of the lending market, but the majority of banks are still operating business as usual and are pursuing new opportunities,” Dzbanek said. “We are currently negotiating term sheets with a number of financial institutions that still want to put money on the street.”

Dzbanek said his pipeline is a healthy balance between both acquisition and refinance opportunities. In this climate he is advising clients to run a process and identify multiple lenders for each project to mitigate risk.

“When there is uncertainty in the market, it’s even more important for borrowers to be exposed to as many options and banking relationships as possible,” he said.

He noted that the problems in the banking sector aren’t the result of soured commercial real estate loans or questionable underwriting, but macro issues that are working their way through the economy. Most important, the federal government is guaranteeing that all depositors at the failed banks will have access to their money above the FDIC $250,000 insured maximum.

“While there will be volatility in the short-term, this crisis will firm up a new bedrock for New York City commercial real estate lending,” Dzbanek said. “This will be an opportunity for new lenders to step up and gain market share and increase their presence in New York City.”

It’s important to remember that overall the banking sector is still in good shape, he said, and that while some institutions are pulling back or implementing stricter underwriting standards others are ready and willing to make commercial real estate loans.