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NYC Council Declines to Override COPA Bill Veto

February 3, 2026

The New York City Council failed to override former Mayor Eric Adam’s veto of the Community Opportunity to Purchase Act (COPA), which effectively stops the legislation for the time being. The bill passed in December on a 31-10 vote and is supported by current Mayor Zohran Mamdani, which means the bill will likely be reintroduced this year. 

Why it matters: As originally drafted, COPA Int 0902-2024 would have applied an additional waiting period and processes to every multifamily building sale in the city. The bill saw several updates that narrowed the scope to distressed buildings and reduced the overall timeframe.

• CREFC submitted a letter to council members highlighting its concerns with the legislation. Click here for the full letter. 
• The bill passed on December 18 by a 31-10 margin (not including seven abstaining and three absences), which was short of the 34 votes (2/3 threshold) to overcome a mayoral veto. 
• While the bill did not muster a supermajority, the mayoral support and comfortable margin make it more likely some version of COPA will be reintroduced and acted on this year. 

What they’re saying: The new Council Speaker, Julie Menin, declined to bring the measure for an override as it did not pass with the required supermajority. Menin had abstained from voting in December and has declined to indicate her support, even amid public pressure from Mamdani to schedule an override vote. 

The bill’s author, Council member Sandy Nurse, reiterated her commitment to the effort in a statement to the Gothamist:

Yes, but: According to Politico, the mayor’s law department raised concerns to lawmakers that COPA could “unlawfully restrict a property owner’s commercial speech rights to engage with the market” and be subject to legal challenges “due to a constitutional prohibition against placing certain restrictions on private property usage.” 

The bottom line: Expect the City Council to act on the bill again this year amid fierce support from advocates and criticism from the opposition. Even with a narrowed scope and timeframe, COPA—if passed—will likely be subject to legal challenges. 

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

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Senate Primary Update 

February 3, 2026

There are competitive primaries all across the country that will shape the midterms on both sides of the aisle. Below, we detail the most consequential primaries to the battle for the Senate and the dates of the contests.

Georgia (Democratic Incumbent): May, 19, 2026

• Georgia is shaping up as one of the marquee Senate races of 2026, mostly because Republicans still can’t seem to land a clean, obvious challenger to incumbent Sen. Jon Ossoff (D-GA). 
• The GOP primary is a three-way fight between Reps. Buddy Carter, Mike Collins, and former Tennessee football coach Derek Dooley. Such a messy primary could easily go to a runoff, which would further drain GOP resources and delay consolidation.

Michigan (Open Democratic Seat): August 4, 2026

• Michigan Democrats have a crowded and potentially bruising primary that’s creating real risk for the party to keep retiring Sen. Gary Peters’ (D-MI) seat. Rep. Haley Stevens, state Senator Mallory McMorrow, and former gubernatorial candidate Abdul El-Sayed are all running, splitting the Democratic coalition three ways. 
• Stevens brings fundraising strength and House experience, McMorrow has strong name recognition and grassroots energy, and El-Sayed appeals to the progressive wing, but carries baggage from his past statewide loss.

Maine (Republican Incumbent): June 9, 2026

• On the Democratic side, the primary is unusually intense. Gov. Janet Mills represents the establishment option, while Graham Platner, a veteran and oyster farmer with an outsider message, has built surprising momentum despite a string of controversies. 
• If Democrats nominate someone damaged or overly polarizing, Collins’s crossover appeal becomes even more potent. 
• Collins has been able to consistently win over Democratic voters in the state as a Republican. Maine voted for Harris by seven points in 2024 and voted for Biden by nine points in 2020, when Collins was last on the ballot.

Texas (Republican Incumbent): March 3, 2026 

• Republican Sen. John Cornyn is facing serious challengers from within his own party from current Texas Attorney General Ken Paxton, as well as Representative Wesley Hunt (R-TX-38). 
• The race will likely come down to Paxton and Cornyn, with polls indicating the race will be extremely close. However, with Hunt in the race it seems as though neither will reach the 50% threshold, meaning a runoff in May is likely.
• On the Democratic side, state senator James Talarico is leading Representative Jasmine Crockett (D-TX-30). It looks as though Talarico has a chance to win over 50% avoiding a runoff election, although polls show him just below that point as of today.

What’s next: As these states pick their nominees, they will shape their races and influence where each party plans to spend their money and resources. The candidates nominated to each of these races will be crucial to their parties success or failure this fall.

Contact James Montfort (jmontfort@crefc.org) with any questions.

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Q1 Congressional Outlook 

February 3, 2026

While the duration and fallout from the ongoing government shutdown may slow progress on a number of congressional priorities, GOP leaders are hoping to move on an ambitious agenda ahead of the midterm elections. 

Why it matters: The closer Congress gets to the midterms, the less likely lawmakers will be able to muster bipartisan support for their efforts. While the House and Senate have relatively robust session schedules, both chambers will take the traditional August and October (in election years) recesses.

The big picture: After the current fiscal year funding is resolved, Congress will have to act on FY 2027 before October 1, either with appropriations bills or a continuing resolution. The following are items we expect Congress to work on in the near-term: 

• Housing Bills: The broadly bipartisan Housing for the 21st Century Act could see action on the House floor in February. However, the larger question is how the House and Senate will work to meld the House legislation with the Senate-passed ROAD to Housing Act. While both were bipartisan, some GOP House members have concerns over certain spending programs in the Senate Bill. 
• TRIA: The strong bipartisan vote from the House Financial Services Committee on reauthorizing the Terrorism Risk Insurance Act (TRIA) makes action on the House floor an easier proposition in the near-term. The bill could move on the suspension calendar (requiring a two-thirds majority vote) or hitch a ride on larger legislation. Action in the Senate will likely continue beyond Q1. 
• Cryptocurrency: Senate Banking action on the bill has stalled over ongoing disagreement between traditional financial institutions and the crypto world. The bill would institute statutory and regulatory oversight for the digital asset space. However, the market structure effort will not likely be as bipartisan as the GENIUS Act, which covers stablecoins. 
• Confirmations: As we cover above, the Senate Banking Committee will consider Kevin Warsh’s nomination as Federal Reserve Chair. Yet, Sen. Thom Tillis’ procedural opposition will effectively delay confirmation. 
  

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President Trump Nominates Kevin Warsh to Lead the Fed

February 3, 2026

On January 30, President Trump announced that he will nominate Kevin Warsh to succeed Jerome Powell as the next Chair of the Federal Reserve.

• Other potential candidates had included BlackRock executive Rick Rieder, Trump economic adviser Kevin Hassett, and current Fed board member Christopher Waller.

Warsh, a former Morgan Stanley banker and member of the Federal Reserve Board of Governors during the great financial crisis, is currently a visiting fellow at Stanford’s Hoover Institution. 

Hawk or Dove? While Fed governor during the financial crisis, Warsh gained a hawkish reputation, particularly when he started to share his opposition to then chair Ben Bernanke’s QE strategy. 

• He has expressed more dovish views lately. As reported by Politico, in an appearance on Fox Business News last summer, Warsh said:

What’s next: Warsh does not face a straightforward path to confirmation. Some Republican senators are concerned about the Fed’s independence in light of the Justice Department’s investigation into Chair Powell’s Congressional testimony about cost overruns related to the Fed headquarters renovation. 

• Sen. Thom Tillis (R-N.C.), whose vote on the Senate Banking Committee is necessary to advance Warsh’s nomination to the Senate floor, said Warsh “is a qualified nominee with a deep understanding of monetary policy.”
• However, Tillis reiterated on Friday that he will oppose any Fed nominee until the Justice Department’s probe has been resolved. 
• TD Cowen’s Jaret Seiberg noted that, in theory, Tillis could block Warsh’s nomination until he retires from the Senate at the end of 2026.

What they're saying: Warsh’s nomination has been received positively by Wall Street and the business community. In a statement issued on Friday, CREFC President & CEO Lisa Pendergast said: 

Federal Reserve policy has a direct and significant impact on commercial real estate finance, influencing interest rates, liquidity, and the availability of capital across CRE lending and securitization markets. Strong, transparent leadership at the Fed is essential to maintaining market stability and supporting economic growth.

We look forward to engaging with Mr. Warsh and policymakers throughout the confirmation process and beyond to advance policies that promote a healthy, resilient commercial real estate finance system.

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Economy, the Fed, and Rates…

February 3, 2026

Economic Data & Labor Market

• Economy enters 2026 running above trend. The Dallas Fed's Weekly Economic Index rose to 2.49% (four-quarter GDP equivalent) for the week ended January 24, up from a revised 2.16% the prior week and above the 13-week moving average of 2.26%. For context, fourth-quarter GDP growth through Q3 2025 was 2.33%. Separately, Bloomberg Economics' high-frequency dashboard shows consumer spending, travel demand, and industrial production all flashing green.
• Jobless claims confirm the resilience story. Initial claims declined 1,000 to 209,000 for the week ended January 24; continuing claims fell 38,000 to 1.827 million. One watch item: continuing claims from former federal employees rose to 13,360, well above the 7,372 a year ago, suggesting that cohort is struggling to find new work.
• Producer prices came in hot—and it matters for PCE. December PPI surprised at +0.5% m/m versus its 0.2% estimate; core PPI ex-food/energy jumped +0.7%. YoY, the headline hit 3.0% (vs. 2.8% est.) and core 3.3% (vs. 2.9% est.). Services margins—particularly machinery and equipment wholesaling—drove the overshoot. Several components feed directly into the Fed’s preferred PCE gauge, due February 20.
• Tariff threats: loud but unevenly executed. Bloomberg Economics tracked 49 Trump tariff threats since November 2024. Only ~27% were fully implemented; the share that stuck is closer to 20%. Another 43% were quietly withdrawn or forgotten. But corporate earnings tell the real story: Caterpillar expects ~$2.6B in tariff costs this year, Norfolk Southern flagged eroding demand, and UPS said shifting trade flows are pressuring margins.
  

Federal Reserve Policy & the Warsh Nomination

• Fed holds steady at 3.50%–3.75%; drops labor-risk language. Ten FOMC members voted to keep rates unchanged; two (Governors Miran and Waller) wanted a cut — the widest dovish split in recent memory. But the statement itself leaned hawkish: the Fed removed language it had included in the prior three meetings warning that the job market might weaken. Powell added that the January economic outlook was stronger than December's. Bottom line: even with two dissents pushing for easier policy, the Committee as a whole sees less urgency to cut.
• Trump nominates Kevin Warsh—and expectations immediately tangle. The former Fed Governor (2006–2011) is a long-standing inflation hawk who recently aligned with Trump by arguing for lower rates. He has called the Fed’s balance sheet “bloated,” expressed skepticism of the dot plot, and argued AI-driven productivity means growth needn’t produce inflation. Trump made expectations plain, saying Warsh “certainly wants to cut rates.”
• Street consensus: pragmatist, not puppet—but duration risk rises. Nearly half of Bloomberg survey respondents said the Warsh pick clouds the bond outlook; 44% saw a brighter dollar. Evercore called Warsh a pragmatist, not an ideological hawk, cautioning against overdoing the hawkish trade. TD Securities noted the tension between his decade of hawkish positioning and recent dovish pivot. 
• Fiscal dominance: the elephant nobody wants to price. The NYT’s Binyamin Appelbaum flagged that Treasury paid $970 billion in interest last year—~19 cents of every tax dollar. By 2035, that could reach 27 cents. Former Chair Janet Yellen insisted the government still has time to improve fiscal health—a statement that itself signals how serious the concern has become. For CRE borrowers banking on lower rates, the bond market may ultimately make that decision regardless of who chairs the Fed.
• BLS leadership: quieter but consequential. Trump nominated BLS economist Brett Matsumoto to lead the agency after the prior pick was pulled. About a third of BLS leadership positions sit empty, and the agency has cut back on data collection.

Treasury Yields & Bond Markets

• Yields grind higher; curve twist-steepens on Warsh. The 10-year closed at 4.240%, up ~9 bps for January. The 30-year hit 4.872%, its second-highest close of 2026. The Warsh nomination triggered textbook twist steepening: 2-year yields fell ~4 bps and the 30-year rose ~2 bps, steepening 2s/10s and 5s/30s by 4–5 bps on Friday alone.
• The spread math for long-duration borrowers worsens. The 10-year is up 11 bps from its 2026 low of 4.13% (January 14) and remains 38 bps below its 52-week high. The 30-year is up 9 bps from its 2026 low (4.78%). Direction of travel: higher. If Warsh follows through on balance-sheet reduction, term premiums could widen further.

Dollar, Commodities & Market Dynamics

• Gold and silver suffer historic reversals. Gold plunged ~12% intraday—its biggest decline since the early 1980s—settling down 8.9% at $4,894/oz. Silver collapsed 26% to $85.20 after a 36% intraday drop (a record). The dollar’s Warsh-fueled rally triggered the selloff. Even after Friday’s carnage, gold still registered a 13% monthly gain.
• Dollar hedging: the debate Powell won’t touch. Powell dismissed a BIS paper that concluded global investors are increasingly hedging their dollar exposures. The FT’s Unhedged column called this puzzling, noting FX market participants consistently cite hedging as the primary driver of recent dollar weakness. The April 2025 “liberation day” episode—when the dollar, equities, and Treasuries all fell simultaneously—appears to have structurally shifted hedging behavior.

Housing Policy & Institutional Investors

• Trump’s crackdown on big housing investors could backfire. An executive order curbing institutional ownership of single-family homes echoes a policy progressive Democrats have pushed for years. But the target appears misplaced: UBS estimates institutions own ~0.35% of U.S. single-family stock and ~3% of single-family rentals. The real affordability barriers are zoning, permitting, and construction costs. As Atlas Real Estate’s CEO warned, restricting capital will constrain supply further and drive up prices—the opposite of the stated goal.

CRE Finance Market Implications

• Warsh is a double-edged sword for CRE. His openness to short-rate cuts (two now priced for H2 2026) could deliver ~50 bps of relief for floating-rate bridge and construction loans. But his balance-sheet reduction goals push long-end yields higher — precisely the rates that fixed-rate financing is benchmarked to — meaning permanent debt may see minimal improvement or modest deterioration. All-in CRE mortgage coupons remain in the high-5% to mid-6% range. Avison Young's CEO noted the elevated 10-year "is not undermining the recovery, but it's slowing some decision-making." Eastdil Secured's president offered a more optimistic read, calling Warsh the best pick for keeping inflation and 10-year yields in check.
• Tariff-driven input costs hit the property stack. Caterpillar’s $2.6B tariff cost estimate, plus PPI data showing core goods price acceleration in construction machinery, industrial chemicals, and household appliances, signals higher hard-cost budgets for CRE development—even before labor and financing are factored in.
• Institutional capital may pivot toward multifamily. If the executive order effectively restricts institutional capital from single-family housing, some of that capital could flow toward multifamily and build-to-rent CRE—where institutional participation is less politically fraught, and the economics of scale remain intact. Watch for reallocation into purpose-built rental communities, particularly in Sun Belt markets.
• AI capex crowd-out in funding markets. The hundreds of billions in aggregate AI capital spending now planned across hyperscalers and startups may keep intermittent upward pressure on real rates and credit spreads, competing for capital with CRE debt and equity issuance. Development and transitional assets — which depend on access to capital markets — are most exposed.
• Data integrity is a sleeper risk. Between the shutdown's impact on data collection and the BLS leadership vacuum — roughly a third of senior positions sit empty, and the agency has cut back on data collection — the economic data underpinning CRE appraisals, market studies, and credit models may become less reliable. This deserves more attention than it's getting.

You can download CREFC’s one-page MarketMetrics, which includes statistics covering the economy and the CRE debt capital markets, here.

Contact Raj Aidasani (raidasani@crefc.org) with any questions.

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CRE Securitized Debt Update

February 3, 2026

Private-Label CMBS and CRE CLOs

Six transactions totaling $3.9 billion priced last week:

1. BMARK 2026-V20, an $886.9 million conduit backed by 34 five-year loans secured by 59 properties from Deutsche, Goldman, Citi, Barclays, and BMO.
2. BRSP 2026-FL3, an $856.7 million CRE CLO sponsored by BrightSpire. The managed transaction comprises 29 loans secured by 30 properties. The pool is 95% multifamily and 5% mixed-use.
3. BMO 2026-C14, a $631.6 million conduit backed by 27 mostly 10-year loans secured by 88 properties from BMO, Starwood, SocGen, Argentic, UBS, Natixis, Zions, Citi, and Goldman.
4. CSTL 2026-GATE3, a $630 million SASB backed by a fixed-rate, five-year loan for West Shore to refinance a portfolio of 13 garden-style apartment complexes in five states.
5. LS 2026-HTL6, a $500 million SASB backed by a floating-rate, five-year loan (at full extension) for Lone Star Funds to refinance six hotels in four states.
6. GGP 2026-TY, a $435 million SASB backed by a fixed-rate, five-year loan for GGP to refinance the Tysons Galleria mall in McLean, VA.

By the numbers: YTD 2026 private-label CMBS and CRE CLO issuance totaled $15.4 billion, representing a 15% increase from the $13.3 billion recorded for the same period in 2025.

Spreads Hold Steady

• Conduit AAA and A-S spreads were unchanged at +75 and +105 bps, respectively.
• Conduit AA and A spreads were unchanged at +125 and +175 bps, respectively.
• Conduit BBB- spreads were unchanged at +435 bps.
• SASB AAA spreads moved by -7 to 0 bps, depending on property type, to a range of +100 to +135 bps. 
• CRE CLO AAA spreads were unchanged at +135/+140 bps (static/managed), while BBB- spreads were unchanged at +275/+285 bps (static/managed).

Agency CMBS

• Agency issuance totaled $4.5 billion last week, comprising $3 billion in Fannie DUS, a $1.3 billion in Freddie K transactions, and $266.5 million in Ginnie Mae Project Loan transactions.
• Agency issuance for YTD 2026 totaled $19.2 billion, 75% higher than the $11 billion recorded for same-period 2025.

Contact Raj Aidasani (raidasani@crefc.org) with any questions.

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Government Funding Update

February 3, 2026

The government entered a partial shutdown on Saturday amid Democratic pushback on Department of Homeland Security and ICE funding. 

• To date, six appropriations bills have been passed into law, so this current shutdown is only a partial one compared to the 43-day shutdown in the fall.
• Agencies and functions covered by the following bills are experiencing a lapse in appropriations. They include:
  • Defense,
  • Homeland Security,
  • Financial Services and General Government Appropriations,
  • Labor-HHS-Education, 
  • National Security-State, and
  • Transportation-HUD.
• The National Flood Insurance Program (NFIP) has also lapsed as it did in 2025.

Where we stand as of today: Eager to avoid another shutdown, the White House struck a deal with Senate Democrats to temporarily fund DHS at current levels for two weeks while the negotiations play out.

• Trump has been personally involved in getting the deal passed, and had a White House meeting with two members who had originally expressed that they wouldn’t vote for the bill. 
• The pair were promised a vote in the Senate on the “SAVE Act” which would require Americans to show proof of citizenship in person to register to vote in federal elections.
• GOP Reps. Anna Paulina Luna of Florida and Tim Burchett of Tennessee told reporters they will vote "yes" following their meeting at the White House on Monday. 
• Senate Action: The compromise package passed the Senate on Friday, January 30 by a bipartisan vote of 71-29.

House Action: On the other side of the Capitol, the House needs to take up the new bill, which is proving to be more complicated. 

• Speaker Mike Johnson only has a one vote margin, and with all Democrats unified in opposition, he can only afford to lose one vote, and not all Republicans are totally on board with the spending package just yet.
• Minority Leader Hakeem Jeffries was not party to the White House and Senate dealmaking and the Democratic caucus is opposing the measure, which took the expedited suspension vote procedure off the table. 
  

“Let’s say I’m confident that we’ll do it at least by Tuesday.” 

Source: CNBC

However, another GOP vote may be holding out. According to CNN, Republican Rep. Byron Donalds of Florida, noted that he would require the voter ID law to be attached to the funding bill in the House package before he could back leadership on a key procedural vote Tuesday.

The bottom line: Trump and Johnson have been effective at passing party-line votes through the House. While Democrats are not expected to join in passing the rule that sets up the final vote, a few moderates may cross the aisle on the final bill. 

Contact James Montfort (jmontfort@crefc.org) with any questions.

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Statement from CREFC President & CEO Lisa Pendergast Regarding Kevin Warsh’s Nomination to Serve as Federal Reserve Chair

January 30, 2026

The CRE Finance Council (CREFC) issued the following statement from Lisa Pendergast, President and CEO, on the nomination of Kevin Warsh to serve as Chair of the Federal Reserve:

CREFC congratulates Kevin Warsh on his nomination to lead the Federal Reserve. As a former Federal Reserve Governor with deep experience in financial markets, Mr. Warsh brings valuable perspective at a critical moment for the U.S. economy.

Federal Reserve policy has a direct and significant impact on commercial real estate finance, influencing interest rates, liquidity, and the availability of capital across CRE lending and securitization markets. Strong, transparent leadership at the Fed is essential to maintaining market stability and supporting economic growth.

We look forward to engaging with Mr. Warsh and policymakers throughout the confirmation process and beyond to advance policies that promote a healthy, resilient commercial real estate finance system.

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CREFC's December 2025 Monthly CMBS Loan Performance Report

January 30, 2026

CRE Finance Council has released a report on CMBS loan performance for December.* 

Key takeaways:
  
DELINQUENCY RATE CLIMBS AGAIN TO END 2025

• Conduit/SASB CMBS combined delinquency rate of 7.30%
  • Delinquency rate increased 4 bps in December and in eight of 12 months in 2025; On a YOY basis, the overall combined delinquency rate rose 73 bps (7.30% vs. 6.57% in December 2024)
• Office stabilization gains traction, but retail emerges as the new stress leader
  • Office posted large improvements in both delinquency (−37 bps to 11.31%) and special servicing (−52 bps), marking its second consecutive month of improvement
  • Retail displaced office as the top contributor to new SS transfers, accounting for nearly half of December's $1.9B in new transfers
• The maturity wall remains the elephant in the room
  • When including performing matured balloons (loans current on payments but past maturity), the effective delinquency rate rises to 8.75%—signaling that extension and modification activity is masking underlying refinancing stress

*Source: Trepp. CMBS data in this report reflect a total outstanding balance of $637.1B: 53.1% ($338.5B) conduit CMBS, 46.9% ($298.6B) single-asset/single-borrower (SASB) CMBS.

Click here to download the full report. Contact Raj Aidasani for more information on CMBS loan performance. 

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