In 2023, the Federal Reserve established the Bank Term Funding Program (BTFP) as a response to the failures and issues of Silicon Valley Bank and Signature Bank. The BTFP aims to provide liquidity to U.S. depository institutions and to assure depositors that banks have the ability to meet their needs. A key difference between the BTFP and other options currently available to banks is that the assets they post as collateral at book value and note the current market value, so long as the asset was acquired prior to March 12, 2023, which has provided much needed calm to the markets ever since.
There is an increasingly positive outlook for retail real estate space as post-COVID trends indicate increasing competition and demand in the retail sector. Recent data shows that landlords are having a much easier time filling prime retail space as shopping center vacancies have fallen to an all-time twenty-year low. If trends continue in this direction, expect to see landlords aggressively moving away from COVID era concessions in favor of more landlord favorable rent structures.