On January 30, President Trump nominated Kevin Warsh be the next chair of the Federal Reserve, elevating him above three other finalists: 1) Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income; 2) Kevin Hassett, Director of the National Economic Council; and 3) Chris Waller, an economist and incumbent Fed Governor since 2020.

If confirmed by the Senate, Warsh will become the 17th chair of the nation’s central bank — succeeding Jerome Powell, whose term ends on May 15.

Warsh is no stranger to the Federal Reserve. The former Morgan Stanley financier, now 55, was first nominated to serve on the Federal Reserve Board of Governors by President Bush in January 2006.

Then 35, he was the youngest Fed Governor in history — though neither his age nor his relative inexperience prevented him from playing an important role as a Wall Street liaison during the 2008 financial crisis. During the crisis, he worked closely with then-chair Ben Bernanke to find acquirers for failing investment banks, and subsequently laid the groundwork for a “macroprudential” approach to post-crisis financial reform.

As the economy started to recover, Warsh began to disagree with Bernanke and others over the continued use of quantitative easing (QE) as a means of lowering long-term interest rates and spurring economic growth, for fear that excessive liquidity could result in higher inflation.

To have Congress pass fiscal and regulatory reforms instead, he argued, was a better course of action than an approach that relied on monetary policy alone. Eager to move on, he resigned from the Board in February 2011.

If Warsh returns to the Board as chair in mid-2026, it will be more than 15 years since he was last a Fed Governor. How might he oversee monetary policy this time around? Here’s the rundown:

1. He Wants a Smaller Fed Balance Sheet

Warsh’s criticism of QE has not subsided. In a November 2025 Wall Street Journal Op-Ed, he called for a reduction in the Fed’s “bloated” balance sheet — in other words, quantitative tightening (QT) — arguing that the Fed’s $6.6 trillion worth of Treasury and agency mortgage-backed securities (MBS) distorts financial markets. The private credit markets, he claims, should be the arbiter of credit conditions — not the Fed.

• Why this matters for hard assets: A smaller Fed balance sheet could mean tighter liquidity and higher long-term borrowing costs. In that environment, hard assets with strong in-place cash flow and conservative leverage tend to outperform more speculative investments. Discipline matters more when liquidity is not abundant.

2. He Advocates for Lower Interest Rates (For Now)

Warsh believes that shrinking the Fed’s balance sheet could allow for that “largesse [to] be redeployed in the form of lower interest rates to support households and small and medium-size businesses.” This aligns him with the administration’s call for lower interest rates — a directive that has challenged Fed independence and stoked tensions between Powell and the President.

The market’s reaction, though, shows that investors are less confident that Warsh will bend the knee to the President’s wishes. Following his nomination, the spot price of silver plunged 28%, the steepest one-day loss since “Silver Thursday” on March 27, 1980. This move suggests that Warsh’s nominations have eased concerns about the erosion of the Federal Reserve’s independence and signals that investors may expect higher — rather than lower — interest rates once he assumes the chairmanship.

• Why this matters for hard assets: If policy rates decline while the Fed reduces its balance sheet, financing conditions may normalize without inflating asset prices. For real estate investors, this supports steady transaction activity but still rewards income growth and operational value creation over relying on falling cap rates.

3. He Remains an Inflation Hawk 

Warsh’s staunch advocacy for QT, which reduces money in circulation, ultimately stems from his desire to keep a lid on inflation. Even his openness towards lower interest rates is backed by an inflation-focused rationale: supply-side productivity gains from AI, he believes, can absorb the boost in demand from lower rates — resulting in economic growth without the requisite upward pressure on prices.

• Why this matters for hard assets: A continued focus on inflation control reinforces the value of assets that generate durable income. Properties with essential tenants and structured rent increases can help preserve purchasing power in uncertain inflation environments. 

What Does This Mean for Recentric?

No matter Warsh’s views on the Fed’s balance sheet, interest rates, or inflation, he will be just one of 12 voting members on the Federal Open Market Committee (FOMC). While the chair seeks consensus, Fed Governors can and do dissent.

Aside from a diversity of views at the committee level, monetary policy actions are guided by economic data, which means that interest rates are in flux as much as the economic and geopolitical factors that inform central banking decisions. Put simply, the future path of interest rates — no matter who is Fed chair — is notoriously difficult to predict.

At Recentric, we believe stewards of capital — particularly in commercial real estate — should not rely on favorable macroeconomic tailwinds as a driver of performance. True alpha is generated during the holding period through disciplined asset management, property operations, and value creation, not through the hope of declining interest rates. While there are periods in a cycle when lower rates can provide a tailwind, timing dispositions to coincide with rate declines is difficult and unpredictable. Rather than underwriting to variables outside our control, we focus on the operational levers we can influence directly.

We look forward to showing how Recentric’s expertise as an operator helps us navigate all market landscapes on behalf of our investors.

Recentric’s portfolio continues to perform very well given the market conditions. Our team is focused on exceeding our tenants’ and their patients’/employees’ expectations and delivering strong value as an owner/operator of our portfolio.

Key Performance Indicators:

• Weighted Average Vacancy Levels: 15.16%
• Portfolio Weighted Average Lease Term WALT: 3.96 years
• Debt Service Coverage Ratio (weighted average): 1.66X
• Loan-to-Value = Long-Term Debt / Mark-to-Market Asset Value: 51.48%

The results of the 2024 election are starting to ripple through the U.S. economy — and commercial real estate is feeling the effects. Higher interest rates, regulatory shifts, and economic uncertainty are amplifying the challenges already facing the traditional office sector. While the broader market navigates these headwinds, Recentric sees a major opportunity taking shape: the strategic conversion of distressed office assets into thriving healthcare facilities.

Here are three strong reasons why we believe this opportunity deserves your attention:

1) Office Headwinds Create Opening for Healthcare Real Estate

General office properties continue to struggle. National vacancy rates have risen to 19.9%, with key markets like Denver exceeding 25%. Office valuations are down significantly, and over 10% of recent transactions have involved distressed sales. Leasing activity remains sluggish, and tenants continue to shrink their footprints. At the same time, healthcare real estate remains a pillar of stability. Medical office space vacancies hover around 6.3%, and healthcare tenants continue to seek efficient, high-quality outpatient environments. In short: traditional office faces an uphill climb — while healthcare real estate is accelerating on the downhill.

2) Medical Conversions: Unlocking Value in a Shifting Market

Converting underutilized office space into modern healthcare facilities offers several powerful advantages:

• Capture unmet demand from growing healthcare systems and specialty providers.
• Command higher rents and longer lease terms compared to general office tenants.
• De-risk assets by anchoring occupancy with non-cyclical, essential service providers.

These conversions aren’t easy. They require deep industry knowledge, strong healthcare tenant relationships, and operational expertise. That’s where Recentric holds a distinct advantage.

3. Why Recentric Is Positioned to Win

Recentric has spent over a decade building a platform specialized in medical real estate. Our team brings:

• Direct access to healthcare decision-makers: Health systems, specialty groups, and brokers know us and trust our reputation.
• Operational efficiency: We understand the technical nuances — from regulatory compliance to medical buildouts — that make healthcare projects successful.
• Proven execution: Our track record across medical assets has delivered strong returns and served as a safe haven in uncertain times.

We are already evaluating several medical conversion opportunities and moving aggressively where the fundamentals make sense.

Looking Ahead

Post-election economic shifts have created uncertainty across many asset classes, but they have also unveiled compelling opportunities for those positioned to act decisively. At Recentric, we believe that targeted medical conversions represent one of the most attractive strategies for growth and value creation in today’s market — and we are ready to lead the way.

We look forward to capitalizing on these opportunities to deliver strong, sustainable returns for our investors in the quarters and years ahead.

Sources:
CommercialEdge National Office Report (March 2025)
eXp Realty 2025 Commercial Real Estate Market Outlook
Finance & Commerce Medical Office Report (2025)
Wolf Media MOB Sales Performance Q1 2025
CBRE Medical Outpatient Buildings Outlook 2025
CBRE U.S. Healthcare Real Estate Investor Survey 2025

The Trump 2.0 administration is entering its third week since Inauguration Day on January 20th. The changes that are being made are swift, profound and in some cases will have major impacts on the US economy. Here are a few of the recent actions that you should be watching and how they may affect your financial future.

Trade wars and their impact on US economy

A trade war has started, and the Trump administration has fired the first shot. As of Feb 2nd, 2024, new tariffs have been placed on Mexico and Canada of 25% on all goods and 10% on energy products. An instantaneous result of these tariffs is the weakening of the Mexican Peso and Canadian Dollar, and a stronger US Dollar. The Trump administration is citing both countries are not willing to assist in battling illegal immigration and fentanyl smuggling into the United States as the main reason for implementing such tariffs. Such tariffs could drive both Mexico and Canada into a recession, given that the US is their first and second, respectively largest trading partners worldwide. These tariff wars are expected to exacerbate the cost of goods and continue to put pressure on inflation, which is already making a comeback, according to a US News recent report.

Reduction in government’s footprint and budget

DOGE, the Department of Government Efficiency spearheaded by Elon Musk is starting to reduce the size of the government by recently announcing it has cancelled $420 million in contracts in 80 hours. This puts DOGE on track to cut $67 billion per year. Most of these contracts were focused on DEI programs and empty buildings leased through the GSA or General Services Administration. The GSA manages a massive real estate portfolio of 370 million square feet. The Trump administration is planning to sell off two thirds of the government buildings to the private sector which could have a major impact on pricing in the respective markets. Additionally, about three-quarters of the 70 million square feet of office space the GSA leases from private landlords in Washington D.C. is also likely to be canceled, according to Don Peebles, a longtime Washington, D.C.-based developer.

While Recentric’s portfolio includes a GSA tenant, the Army Corp of Engineers, we believe this specialized Risk Mitigation office which handles the Western Region of the United States is not a target for cancelled leases. In fact, since the Trump administration has announced a renewed initiative to drill for oil and gas domestically, the Army Corp of Engineers is required to approve all new drilling sites that affect federally regulated waters and wetlands in the United States, which we believe will make this department even more relevant.

Health Care and the US government

Health care is the largest sector of the US economy ($4.5 trillion in 2022) and of that, the US government makes up 18% of the entire US health care industry. The Trump administration has implemented a spending pause which has been directed largely at the enormous government bureaucracy, however, has inadvertently affected Medicaid payments to states and impacted special funding for safety net hospitals such as Denver Health. The Center for Disease Control and Prevention and the NIH (National Institute for Health) is being targeted by requiring all external communications to be halted. If you have exposure to real estate or equities that center around any of these targeted agencies, you may want to take note.

United States’ fiscal policy is seeing seismic shifts happening at breakneck speed. You can be sure that many of President Trump’s executive actions will be challenged in court, especially when it comes to de-funding programs that have already been approved by Congress. Taking a deep dive into each action can help you to determine what the financial impact will be on your investments and how to prepare for a new administration that has government spending in its crosshairs.

There is an old saying in our industry, that commercial real estate has two speeds: Slow and Slower. In my previous life, I was a dot-commer. The fast-paced world of internet commerce, valuation growth and burn rates all contributed to my transition to investing in commercial real estate in 2002. Since then, I have become accustomed to the slower pace, and quite frankly enjoy the more methodical and measured decision making in real estate.

Here are a few reasons why the tortoise is faster than the hare.

Building Connections

Successful real estate investing always relies on a network of professionals, including real estate brokers, contractors, lenders, and investors. Developing these relationships takes time but can lead to valuable opportunities and insights. Recentric prides itself on having a high moral compass and cementing strong partnerships, and quite frankly friendships, in a sometimes-unfriendly industry! We are all learning every day, and establishing strong ties is not only rewarding, but also profitable!

Maximizing Rental Income and Cash Flow

Health care real estate can provide a consistent income stream, but it may take time to stabilize occupancy rates and optimize lease rates. Recentric’s patience allows our team to properly position each asset with tenants which provides a strong synergy with other tenants in the building. Also, building positive relationships with tenants contributes to longer lease terms and reduced vacancy rates. This requires time and consistent effort, underscoring the need for a patient approach.

Property Appreciation Takes Time

Real estate generally appreciates over time, but significant gains often require years or even decades. Patience ensures that investors can benefit from property value increases, neighborhood development, and execution of value-add strategies that contribute to appreciation. Recentric’s focus each day to create value is based on the following strategies:

1. Converting existing office use to medical use, where possible
2. Upgrading buildings with older systems to be more efficient and environmentally sustainable
3. Maximizing the value of each asset through daily legal, finance and operational incremental improvements.

In real estate investing, patience is not merely a passive waiting game but an active, disciplined approach that encompasses strategic planning, thorough research, and long-term vision. By embracing patience, real estate investors can navigate market complexities, optimize their investments, and ultimately achieve greater financial success. Rushing into real estate ventures without patience can lead to suboptimal decisions, increased risk, and diminished returns. Therefore, cultivating patience is essential for anyone seeking to thrive in the competitive and dynamic world of commercial real estate investment, making the tortoise Recentric’s team mascot!

How the 2024 election cycle may affect your investments

Get out the popcorn, the election mania has begun. While our U.S. Constitution affords each citizen the freedom to vote in a Federal Republic in the best country in the world, one thing is certain: This 2024 election outcome and higher inflation may have a profound impact on your overall net worth.

Debate Fallout

Given the outcome of the recent Presidential debate, the U.S. treasury yields started surging indicating that the re-election chances for Biden took a severe hit, and that a GOP sweep is possible. History shows that budget deficits tend to be larger under one-party control. The prospect of elevated deficits may have already played a role in driving up U.S. treasury yields. This means an increase in the supply of bonds that the market must absorb will apply upward pressure on inflation. As I wrote in my last newsletter, A Hard Asset is Good to Find, investing in hard assets is a good hedge against inflation.

Trump Trade Part 2

After Republicans swept control of Congress and the White House in the 2016 election, longer term yields rose faster than shorter term yields sparking a rally in the stock market. This also happened in January 2021, when Biden and the Democrat controlled Congress passed the COVID-19 relief package providing a rally in the real estate and stock markets. Be sure to consult with your financial adviser, however this may be worth taking advantage of should it come to fruition.

Regional Banks Stressed

As the $2.2 trillion in maturing U.S. commercial loan debt starts to hit the market through 2027, the Federal Reserve has increased scrutiny on regional banks given their exposure to loans and an overall decrease in loan business. “We expect higher for longer rates will continue to pressure credit quality for the next several quarters pushing more banks to build loan loss reserves through 2024,” analysts at Morgan Stanley. This capitulation may force more banks to take back properties and sell at a large discount to remove them from their balance sheets, whereby providing an amazing buying opportunity in 2025. Our company Recentric is poised to take advantage of this possible outcome.

Depending on your investment objectives, the above three scenarios can provide you with an advantage to improve your overall net worth and financial success. As an informed investor, it is important to understand how the political landscape can affect the private markets, and more importantly, your personal portfolio of investments. While commercial real estate is more sensitive to interest rates and employment, the government acts like a silent partner who can significantly impact your returns. Stay informed on what your government partner is going to do to affect your next investment decision.