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Proposed Georgia Bill Caps Institutional Housing Ownership

March 25, 2025

The Georgians First Residential Property Protection Act (HB 555), a bill in the Georgia state legislature, would limit business enterprises from owning more than 2,000 single-family homes or 10 multifamily properties in the state. 

Why it matters: The measure, sponsored by four Republicans and one Democrat, demonstrates increasingly bipartisan political concern over single-family rentals (SFR), but the limitation on multifamily property ownership signals a new pushback on institutional ownership of housing.

• In a committee hearing on March 3, the bill sponsor testified in support of a revised bill expressing concern about increased corporate ownership of SFRs in Georgia. The sponsor cited data that indicated no institution owned more than 1,000 single-family homes prior to 2011.
• Enforcement would be through a private right of action rather than state enforcement against businesses that own more than 2,000 homes. 
• The bill was reported favorably out of the Georgia House Judiciary Committee with only one legislator voting in opposition. The full state House has not yet acted on the bill. 

The big picture: Georgia legislative observers indicate the bill likely will not advance further this session. 

• However, the near-unanimous committee approval with 12 Republicans and five Democrats on the committee indicates the growing local concern on the issue.
• On the federal level, legislation targeting institutional ownership has been limited to Democrats, but moderates have been joining with progressives in supporting the legislation.

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Capital Markets Update Week of 3/25

March 25, 2025

Private-Label CMBS and CRE CLOs

Four transactions totaling $3.9 billion priced last week:

• BX 2025-SPOT, a $1.3 billion SASB backed by a floating-rate, five-year loan (at full extension) for Blackstone to refinance a portfolio consisting of 95 industrial properties, two data centers, and a land parcel totaling 11.7 million sf in 10 states.
• BXMT 2025-FL5, a $1.0 billion CRE CLO sponsored by Blackstone Mortgage Trust, Inc. The managed transaction is comprised of 19 loans secured by 90 properties. The top three property types are multifamily (53.7%), hotel (22.2%), and industrial (10.3%).
• BMARK 2025-V14, a $939.2 million conduit backed by 35 five-year loans secured by 61 properties from Deutsche, Citi, Goldman, Barclays, and BMO.
• BMO 2025-5C9, a $681.7 million conduit backed by 31 mostly five-year loans secured by 54 properties from BMO, Citi, Goldman, 3650, UBS, Deutsche, SocGen, and LoanCore.

By the numbers: Year-to-date, private-label CMBS and CRE CLO issuance totaled $44.1 billion, 130% higher than the $19.2 billion for same-period 2024. 

Spreads Largely Steady

• Conduit AAA and A-S spreads were unchanged at +98 and +140, respectively.
• Conduit AA spreads were unchanged at +180, while A spreads widened by 10 bps to +220.
• Conduit BBB- spreads widened 25 bps at +500.
• SASB AAA spreads were unchanged, ranging from +135 to +145, depending on property type.
• CRE CLO AAA and BBB- spreads were unchanged at +130/+135 (Static / Managed) and +355/+370 (Static / Managed). 

Agency CMBS

• Agency issuance totaled $3 billion last week, consisting of $1.6 billion of Fannie DUS, $1.2 billion of Freddie K, SB, and Multi-PC transactions, and $222.6 million of Ginnie transactions.
• Agency issuance for the year totaled $29.8 billion, 26% higher than the $23.6 billion for same-period 2024.

The Economy, the Fed, and Rates…

• Treasury yields end week lower: The 10-year Treasury yield finished the week down 7 bps to 4.25%, while the two-year yield also dropped 7 bps to 3.95% as investors sought safety amid uncertainty about Trump's tariff policies.
• Markets price in rate cut timing: Traders are anticipating around 65 basis points of Fed rate cuts by year-end, with the next move expected in July. This reflects tempered expectations from earlier in the year when markets had priced in close to three cuts.
• Bonds rally on growth concerns: Bond investors have focused on the Fed's lowered growth forecasts, validating concerns that Trump's trade war and spending cuts will cool the economy. Kevin Flanagan, Head of Fixed Income Strategy at Wisdom Tree, noted:

• Stock volatility continues: The S&P 500 experienced a 10% correction from mid-February, erasing $4 trillion in market value before recovering slightly. Stephanie Roth, Chief Economist at Wolfe Research, notes tariffs have been implemented more aggressively than anticipated:

• Market technicals reflect caution: Trend-following systematic funds have turned net short on US equities, signaling a bearish technical outlook. Retail investors continue aggressive buying – a potentially concerning sign as they historically tend to exit markets last, suggesting equities may still have further downside potential.

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First 100 Days: Regulatory Update

March 25, 2025

• Bessent said getting rid of the financial “corset” imposed by current rules would help spur growth, adding that some of the Fed’s policies on climate and DEI “threatens their independence.” 
• He also said he plans to use his role on the Financial Stability Oversight Council (FSOC) to “keep pushing for safe, sound, and smart deregulation.” 

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FinCEN Limits Corporate Transparency Act Scope

March 25, 2025

Treasury’s Financial Crimes Enforcement Network (FinCEN) published an interim final rule exempting U.S. companies and U.S. persons from the beneficial ownership information (BOI) reporting requirements of the Corporate Transparency Act (CTA). Secretary Scott Bessent had previewed the change earlier this month. 

Why it matters: As we previously covered, the CTA has faced regulatory delays and numerous court challenges, particularly from small businesses.

What they're saying: In a press release announcing the rule change, Treasury described the changes as follows:

• Revises the definition of a “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and have registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or similar office (formerly known as “foreign reporting companies”).
• Exempts entities previously defined as “domestic reporting companies” from the BOI reporting requirements.
• Clarifies that foreign entities will not be required to report any U.S. persons as beneficial owners.
• Also, U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

Contact David McCarthy (dmccarthy@crefc.org) with any questions.

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Update: Congressional Vacancies, Special Elections

March 25, 2025

• Waltz became National Security Advisor, while Gaetz originally was nominated for Attorney General before withdrawing. 
• Both of these special elections are widely expected to go for the Republicans, which will pad Speaker Johnson’s majority, albeit temporarily.

Among Democrats, two lawmakers died this month. Rep. Slyvester Turner (D-TX) passed away on March 5 and Rep. Raul Grijalva (D-AZ) passed away on March 13. There will be special elections to fill these seats, but those are not expected until this fall.

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First 100 Days: Regulatory Update

The Trump administration and Capitol Hill continue to round out senior leadership roles in the financial regulatory apparatus.

Yesterday, President Donald Trump nominated Federal Reserve Governor Michelle Bowman to be the Fed’s next vice chair for supervision. 

• While former Fed Vice-Chair of Supervision Michael Barr stepped down from the Vice-Chair position on February 28, he remains on the Board.
• The Dodd-Frank mandated Vice-Chair of Supervision position must be held by a Fed governor. Given that the Board will not have a vacancy until early 2026, Trump’s choice was either to wait or nominate a current governor.
• One of only three Republicans on the Board, including Chair Jerome Powell, Bowman was considered the likely candidate given her significant experience as a community banker and focus on lighter-touch bank regulation. 

In a recent series of speeches, Bowman outlined the following regulatory agenda:

• Tailored regulation that reflects a bank's size, risk profile, and business model;
• Supervisory transparency to ensure banks understand and can effectively meet regulatory requirements;
• Regulatory frameworks that support technological advancements and new financial products; and
• Emphasis on core financial risks such as liquidity and capital adequacy, over non-financial risks, to maintain the stability and resilience of the banking system. 

Bowman has been a vocal critic of the proposed bank capital requirements that Barr had led. We expect the bank regulators to develop a new proposal that will be capital-neutral. 

What's next: CREFC plans to meet with regulators to ensure our previously stated concerns with the proposal are considered in the re-write. 

• As covered in this Policy and Capital Markets Briefing (PCM) as well as in a CREFC Alert last week, Bill Pulte was confirmed as director of the Federal Housing Finance Agency in a bipartisan 56-43 vote.
• The nominee to lead the Consumer Financial Protection Board, Jonathan McKernan, who was reported out of the Senate Banking Committee a few weeks ago, awaits Senate confirmation.
• Jonathan Gould, nominated to lead the Office of Comptroller of the Currency, has not yet appeared before the Senate Banking Committee. 

Please see here for CREFC’s Regulatory Leadership Tracker.  

As covered in a previous CREFC PCM, Treasury Secretary Scott Bessent said he would leverage his position as chair of the Financial Stability Oversight Committee (FSOC) to better coordinate regulatory policy.

• On March 20, Bessent will preside over an FSOC executive session. The preliminary agenda for the meeting includes updates on:
  • Recent Treasury market developments,
  • Cybersecurity developments, and
  • Homeowner insurance and natural disasters.

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Tax Update: GOP Huddles on Reconciliation 

March 18, 2025

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Capital Markets Update Week of 3/18

March 18, 2025

Private-Label CMBS and CRE CLOs

Five transactions totaling $3.8 billion priced last week:

• TRTX 2025-FL6, a $1.1 billion CRE CLO sponsored by TPG RE Finance Trust, the publicly traded REIT of TPG. The managed transaction is comprised of four whole loans and 16 loan participations secured by 85 properties in 15 states. The top three property types are multifamily (60.8%), hotel (14.3%), and office (11.9%).
• MSBAM 2025-5C1, a $934.6 million conduit backed by 40 5-year loans secured by 67 properties from Morgan Stanley, Argentic, BofA, and Starwood.
• BANK 2025-BNK49, a $929.2 million conduit backed by 37 10-year loans secured by 65 properties from BofA, Morgan Stanley, JPMorgan, Wells, and Citi.
• CHI 2025-SFT, a $610 million SASB backed by a fixed-rate, five-year loan for Hines, the Kennedy family, Diversified Real Estate Capital, and the AFL-CIO Building Investment Trust secured by the Salesforce Tower Chicago, a newly constructed Class A office tower in downtown Chicago.
• WEST 2025-ROSE, a $275 million SASB backed by a fixed-rate, five-year loan for Unibail-Rodamco-Westfield secured by an 818,000-sf portion of the 1.4 million-sf Galleria at Roseville mall in Roseville, CA.

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totaled $40.1 billion, 114% higher than the $18.7 billion for the same period in 2024. 

Spreads Widen Again

• Conduit AAA spreads were wider by 10 bps at +98, while A-S spreads were wider by 25 bps at +140.
• Conduit AA and A spreads were wider by 20 bps and 15 bps to +180 and +210, respectively.
• Conduit BBB- spreads were wider by 25 bps at +475.
• SASB AAA spreads were wider by 10 bps, ranging from +135 to +145, depending on property type.
• CRE CLO AAA and BBB- spreads were unchanged at +130 / +135 (Static / Managed) and +355 / +370 (Static / Managed). 

Agency CMBS

• Agency issuance totaled $2.2 billion last week, consisting of $1.2 billion in Freddie K and Multi-PC transactions, $623.8 million of Fannie DUS, and $279.7 million of Ginnie transactions.
• Agency issuance for the year totaled $26.7 billion, 24% higher than the $21.6 billion for the same period last year.

The Economy, the Fed, and Rates…

• Inflation Expectations: Long-term inflation expectations surged to 3.9% (5-10 years ahead), the highest level since 1993 and up from 3.5% in February. Short-term expectations jumped to 4.9%, up from 4.3% previously and the highest since 2022.
• Unemployment Claims: Weekly jobless claims remained stable at 220,000 for the week ended March 8, down 2,000 from the previous week and slightly below the forecast of 225,000. This indicates the labor market remains resilient despite federal government layoffs.

• March Meeting Expectations: The Fed is widely anticipated to keep interest rates unchanged at the current range of 4.25% - 4.50% at its March 18-19 policy meeting as it awaits more clarity on tariff impacts and inflation trajectory.
• Stagflation Risks Complicate Fed Decision-making: Economists broadly expect the Fed to maintain interest rates through the first half of 2025, then begin cutting rates in September amid weakening growth. The challenging economic landscape of persistent core inflation, alongside escalating tariff-induced cost pressures, places the Fed in a precarious position – “damned if they do, damned if they don’t,” according to Ryan Sweet at Oxford Economics.
• Policy Framework Review: The Fed's ongoing review of its monetary policy framework is expected to conclude in August, with debate around whether the 2% inflation target remains appropriate in a changed economic landscape. Mohamed El-Erian offered this perspective:

• Rate Cut Outlook: Economists surveyed by Bloomberg now expect the Fed to deliver two quarter-point rate cuts in 2025, starting in September - a change from previous expectations of three cuts beginning in March.
• Morgan Stanley Predicts Early and Multiple Rate Cuts: Ellen Zentner from Morgan Stanley sees a real risk that the Fed might start cutting rates as early as May if labor market data deteriorates markedly. Zentner forecasts potentially two to three rate cuts this year, responding to significant headwinds from tariffs, reduced immigration, and federal government layoffs.

Business Outlook and Consumer Behavior

• Airline Industry Challenges: Major US airlines including American, Delta, and Southwest have slashed their financial forecasts, citing weaker demand. Delta CEO Ed Bastian described the start of the year as "a parade of horribles."
• Retail Sector Warning Signs: Major retailers including Kohl's, Dick's Sporting Goods, and Walmart have warned of consumer weakness. Kohl's CEO Ashley Buchanan noted that consumers making less than $50,000 are "pretty constrained from a discretionary standpoint."
• Business Uncertainty: The Financial Times describes the Trump administration’s policy approach as "bewildering volatility," warning that its unpredictable nature dampens corporate sentiment, postpones investment decisions, and ultimately undermines economic growth.
• Housing Market Cooling: As the spring selling season begins, the housing market faces headwinds from high mortgage rates and economic uncertainty. Properties took a median of 54 days to sell in February, the longest stretch in five years.
• Consumer Spending Outlook: Some economists predict a potential "big drop-off" in spending later in the year as tariff hikes begin to be passed to consumers. There are signs consumers have been "front-loading" purchases of durable goods to beat anticipated price increases.

• Stock Market Recovery: After falling into correction territory on Thursday (down more than 10% from its peak), the S&P 500 rallied 2.1% on Friday - its best day since November 6, 2024. The tech-heavy Nasdaq Composite rose 2.6%.
• Safe Haven Assets: Gold exceeded $3,000 per troy ounce for the first time ever, settling at a record close of $2,994.50 on Friday. The precious metal has risen 39% over the past year amid economic uncertainty and central bank buying.

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William Pulte Confirmed as FHFA Director

March 18, 2025

• Three Democrats — Sen. Ruben Gallego (D-AZ), Sen. Elissa Slotkin (D-MI), and Sen. Angela Alsobrooks (D-MD) — joined all Republicans in voting to confirm Pulte.
• The bipartisan vote came quickly after the Senate Banking Committee favorably reported Pulte on a 15-9 vote last week.

Why it matters: FHFA regulates housing agencies Fannie Mae and Freddie Mac, and the Federal Home Loan Bank (FHLB) system. As Director, Pulte will be a key figure in addressing the housing affordability crisis and, potentially, the path forward for the Government Sponsored Enterprises (GSEs), currently in conservatorship.

Pulte is now chair of Fannie and of Freddie after adding himself to both boards. He also added FHFA general counsel Clinton Jones to the boards of both GSEs. 

• Pulte made several other changes to the GSE boards, removing several current members and adding new ones.
• He has posted to social media that he is working with the GSEs to make housing more affordable.

• Pulte deferred on many policy questions during the hearing saying he preferred to start at FHFA before weighing in on specifics, but he pledged to work with senators from both parties on their concerns.
• Although she had sent a letter to Pulte soliciting his views on the housing agencies’ exit from conservatorship, Ranking Member Elizabeth Warren (D-MA) focused her entire five minutes of questioning during the hearing on the Consumer Financial Protection Bureau (CFPB).
• Pulte answered a number of Warren’s detailed written questions by reiterating his commitment to follow the law and focus on the housing finance system’s safety and soundness. But he largely declined to weigh in on potential GSE reform efforts.

What's next: CREFC looks forward to continued discussions and regular meetings with the FHFA. We will continue to monitor developments at the FHFA and report on any new policies the regulator introduces.

Contact Sairah Burki (sburki@crefc.org) or David McCarthy (dmccarthy@crefc.org) with any questions.

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