1315_Nareit Testimonials_REITwise_Reilly_v2
04/14/2023 | by Nareit Staff

Jim Reilly, managing director and head of investment grade real estate debt capital markets at J.P. Morgan Securities, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.

Referencing what decisions the Federal Reserve might make this year, Reilly said that J.P. Morgan thinks a 25 basis point increase would be the “balanced response,” followed by another 25 basis point increase, and then the Fed will likely be on hold for the rest of the year.

“So far, the Fed increases haven’t impacted inflation meaningfully,” Reilly added, noting though that there is a lag effect. “We’re starting to see from data that we have at J.P. Morgan from our credit card portfolio a change in consumer spending, cash balances coming down, [and] higher utility, energy, [and] housing costs running through the consumer.”

Reilly said that the commercial mortgage-backed securities (CMBS) market is currently struggling, along with all of the other asset-backed markets.

“The banks in question that have recently been taken over…have very large residential mortgage-backed portfolios that are being sold into the market,” he said. “That incremental supply is creating some imbalances.”

Reilly added that J.P. Morgan is interested in price discovery, especially in terms of property trading values.