The Fed recently gave us a surprise similar to the one my grandfather used to give my father. My father recently recounted to my son how his grandfather would give him a quarter and a Dr. Pepper each time he saw him. Occasionally, he would surprise him with a half dollar instead, and my father would be thrilled.

In a similar vein, the Fed recently delivered a 50-bps rate cut, exceeding our expectations of just a quarter. This move has provided much-needed relief and optimism for the real estate industry. Despite the market being risk-off for many months, we're already seeing a shift with more bids during the post-Labor Day call for offers and a tightening in the bid-ask spread.

While a 50-bps cut doesn't change the math materially, it does instill confidence and the certainty that rates are not going up or staying stagnant. Looking ahead, we anticipate a surge in market activity due to delayed PIPs, upcoming debt maturities, or the need for LPs to return capital. With further rate cuts expected in Q4, 2025 promises to be a more active year for real estate transactions. Now all I need is a Dr. Pepper!

We look forward to connecting with many of you at The Lodging Conference to discuss these market dynamics and opportunities.