This episode of First Draft Live is presented by Agora.

The godfather of the CMBS market issued a warning that commercial real estate is not out of the woods of its downturn, which is a potential problem for the U.S. economy. 

“The losses in CRE are so big that the rippling effect of those losses to the economy are so big that they could be quite harmful,” Ethan Penner, the founder of Mosaic Real Estate Investors, said on this week’s First Draft Live.

Roughly $23B of CMBS loans have matured without a resolution, and more than 10% are delinquent or in special servicing. Yet the CMBS lending market is roaring, with $60B in new debt issued in just the first six months of this year.

“The truth is there are massive, massive losses in real estate,” said Penner, who is credited with inventing the commercial mortgage-backed security in the early 1990s. “These are breathtaking losses, and I think that clearly the system hasn’t recognized that on any level.”

Penner also spoke about his candidacy for the California governor’s race in 2026, with a platform focused on deregulation and a radical new approach to the homelessness crisis in the state.

“I don’t know where the toilets are in the state house, that makes me an outsider,” he said. “But I do know that the systems are broken.”

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This episode of First Draft Live is presented by Agora.

It’s been a chaotic year for the construction industry. 

Between a volatile tariff regime, elevated interest rates and increased pressures on its labor force, contractors have had to navigate one of the most difficult environments in recent memory. 

On this week’s First Draft Live, Shawmut Design and Construction CEO Les Hiscoe breaks down the impacts of the uncertainty and how his $2B Boston-based company is handling the turmoil. 

“When things aren’t known and you can’t really plan on them in our industry, you can’t give our clients predictability,” he said on the show.

While many developers are responding to the moment by delaying projects — Hiscoe said one of his clients won’t start building until interest rates fall a full percentage point — Shawmut is advising them against it as the impacts of tariffs have yet to fully be realized.

“Waiting is a mistake,” he said.

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The original Opportunity Zone program drove more than $100B into real estate and business investment, but it also faced criticism it missed its mark, failing to spur development in the areas that needed it most.

The One Big Beautiful Bill Act just made OZs permanent and it aims to fix all that, tightening the rules on what areas may be designated OZs, lowering the area median income threshold and heavily incentivizing rural development.

On this week’s First Draft Live, Steve Glickman — co-author of the original OZ program and CEO of Statt — said OZs have been a wild success, especially at spurring much-needed housing.

“You’re talking bang for the buck that’s unparalleled,” he said.

Glickman said the new rules will make OZ 2.0 even better, though how much it drives rural development all comes down to designating sites at “the nexus between need and investability.”

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Liberation Day Part 2 has come and gone, and the U.S. has more clarity on the global trade landscape.

Some of the levies will have CRE breathing easier, but some — including the 35% rate on Canada, a hugely important market for construction material imports — might be worse than the industry feared. Already, tariffs have driven construction costs up anywhere from 6% to 10%.

But at least some of the uncertainty has been chipped away. How will CRE react?
Cushman & Wakefield Senior Economist James Bohnaker said he expects deals to start moving forward again, though in a slow slog, not a rush. But with the U.S. is in an unprecedented macroeconomic environment, scenario planning by CRE investors is crucial.

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The rise of AI is pushing data centers to their limits. Calls for bigger, denser facilities are increasing and tenant power requirements are doubling in many markets.

It’s still not enough to meet the needs of today’s market or tomorrow’s users.

On this episode, Bisnow National Data Center Reporter Dan Rabb said keeping the momentum of the data center boom is all about finding power. And while possible solutions abound — microgrids and nuclear among them — being provided today aren’t going to come through fast enough.

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Though a few brave (or crazy) pioneers have dabbled with using crypto in commercial real estate, the industry has mostly sat on the sidelines for years.

The reason: not enough regulation, no stability or guardrails.

This week, that started to change. The passage of the GENIUS Act to create a framework for stablecoins, plus two other bills making their way through Congress, could lead to a rapid rise of building tokenization, digital transactions and rents paid by bitcoin.

On this week’s episode, Savills Vice Chairman Gabe Marans said the federal framework will kick off a new era for real estate in which deals are done faster and cheaper. And he doesn’t think CRE is ready for it.

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The One Big Beautiful Bill is now law, and its impact on housing could be massive.

The Low-Income Housing Tax Credit received its biggest reform in 25 years, including halving the requirements of how much of its funding must come from municipal bonds.

LIHTC and the Opportunity Zones program were both made permanent, and major adjustments to OZs — including a wave of new zones to come and a new focus on rural areas — could supercharge housing development.

It’s not just a welcome step from the U.S. government, Camden President and Chief Financial Officer Alex Jessett said on this week’s episode — new tax treatment and a deregulation push are absolutely critical to get housing supply up and start to chip away at the nation’s affordable housing crisis.

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U.S. foreign policy these days is a sea of uncertainty — CRE investors’ least favorite thing. From whipsaw tariffs to taxes seen as “revenge” against international players who don’t fall in line with Trump administration goals, money managers are increasingly tentative to put their money on American soil.

This week, Trepp Senior Research Manager Tom Taylor discussed why it makes sense that some global investors are pulling back from the U.S., why it doesn’t worry him too much and who is still investing and in what.

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The Federal Reserve decided yet again to hold interest rates steady at the June FOMC meeting. But CRE sees a turning point. This week, Avison Young CEO Mark Rose said the decision was irrelevant anyway. The CRE recovery isn’t coming soon, he said. It’s here now.

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Trump’s One Big Beautiful Bill is being negotiated in the Senate, and how it gets hammered out could have major implications for commercial real estate. The breadth of possible impacts are huge, from the return of bonus depreciation, which could finally make the math work on deals, to qualified business income deductions allowing CRE to write off more debt and a possible ban on state regulations on AI, which could kill local rules on rent-setting software and change the data center map.

On this episode, EisnerAmper partner Ryan Sievers broke down what CRE needs to have its eye on to maximize profit and get deals moving in a new tax environment.

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