The TreppWire Podcast: A Commercial Real Estate Show · The TreppWire Podcast, A CRE Show

339. From Data Centers to Derivatives: The 4 Ds of 2025 with Jeffrey Berenbaum of Citi Research

·26 min·2 clips

Jeffrey Berenbaum's delinquency analysis prompted the president of Freddie Mac to shut down a major multifamily lending program.

This episode features Jeffrey Berenbaum, head of CMBS and agency CMBS strategy at Citi Research, discussing the 2025 commercial real estate outlook with hosts from the Trepp data firm. Berenbaum brings decades of experience from Freddie Mac, Salomon Brothers, and Citi to analyze current market conditions. He outlines his "Four Ds" framework for 2025: Data Centers, Doge (Department of Government Efficiency), the Dollar, and Derivatives. Data center demand is fueled by AI and cloud computing, with infrastructure build-out estimates ranging from $1 to $2.5 trillion. The DeepSeek AI model's announcement in January initially cooled market exuberance, causing equity prices to drop 6-7%. The federal government's Doge initiative targets cost savings, with the GSA holding 18 million square feet of office leases expiring in 2025. Berenbaum notes that despite mandates bringing federal workers back to offices, the D.C. market still suffers a 19% vacancy rate. He highlights the U.S. dollar's recent weakness and its potential to dampen the typical 10% cross-border investment in U.S. CRE. Interest in derivatives as hedging tools has grown, especially after cash bond liquidity dipped following April's tariff announcement. A surprising insight is that non-bank mortgage REITs, after being on defense, were looking to go on offense with lending in early March before tariff uncertainty arose. Berenbaum cites Citi economists lowering 2025 GDP forecasts to 1.0% and raising inflation projections due to tariff impacts. He recalls a career milestone at Freddie Mac where his analysis of rising multifamily delinquencies led to a program review. The episode questions the long-term exit strategy for data centers, given the aggressive depreciation of their technology. Berenbaum argues multifamily is the most resilient sector due to a national housing shortage and constrained construction starts. The conversation reveals that while soft economic data points to slowing activity, hard data on consumer spending has held up as people buy goods ahead of potential tariffs. A key takeaway is that the labor market's health, particularly the 4.2% unemployment rate, remains the most critical factor for CRE. The tone is analytical and educational, grounded in economic data and institutional research. The style is a professional conversation among industry experts, exploring specific trends and risks. This episode is ideal for commercial real estate investors, analysts, and finance professionals seeking a detailed, research-driven market outlook. Listeners interested in the intersection of macroeconomic policy, tariffs, and property markets will find it valuable. Those seeking introductory content or entertainment-focused business commentary might prefer to skip it.

As heard by us

A grounded CRE discussion on relative value, collateral performance, and refinancing pressure.

This episode treats commercial real estate through CMBS, agency CMBS, and property fundamentals, with Jeffrey Varenbaum giving a steady read on relative value and collateral performance.

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Why you'd press play

You want a clear CMBS read from someone who covers private label, agency, and synthetic markets.

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