The Fed’s Beige Book Says Some Economic Growth But CRE Leasing Down Some in CRE finance, like IPA Capital Markets, a Marcus & Millichap division, have been generally optimistic about CRE markets. But now they're starting to see the hope of coming rate cuts backing off a bit."We didn’t see a cut in March, and we likely won’t see one in May or June, and there is now an outside possibility we won’t see one in 2024 at all," Tyler Johnson, managing director of IPA Capital Markets, tells GlobeSt.com. "However, our team is still optimistic that a cut is coming in July, and is always of the mindset that volatility creates phenomenal opportunities, and the present is no exception to that rule.”That still sees optimistic given the Federal Reserve’s latest Beige Book and also comments coming out of central bank officials.While the Fed’s latest Beige Book, which looks at current economic conditions, said that 10 out of 12 Federal Reserve districts “experienced either slight or modest economic growth,” with the other two seeing no changes in activity, real estate often wasn’t part of it.“Residential construction increased a little, on average, and home sales strengthened in most Districts,” the report said. “In contrast, nonresidential construction was flat, and commercial real estate leasing fell slightly.”Examples include Boston, where business expanded at a “modest pace” and CRE “picked up slightly, on balance,” but that included a “frozen” investment sales market and leasing at a steady slow pace.In New York, despite steady economic performance, CRE markets “weakened noticeably.”Philadelphia was also “steady” as CRE leasing activity and transactions volumes “continued to decline.”Atlanta saw “modest” growth but “mixed” results in commercial real estate, with office and multifamily cooling with falling occupancy.A slight improvement in Chicago was paired with unchanged CRE activity. The same held true for St. Louis and Dallas.San Francisco saw some weakening in CRE.There were some improvements in CRE. The Cleveland district saw a modest increase in business activity and also in non-residential construction. Richmond saw slight growth overall and a slight improvement in CRE and both Minneapolis and Kansas City, MO, saw slight improvements in the economic climate and CRE.But all this must be interpreted through Fed executives tamping down enthusiasm for interest rate cuts. Fed Chair Jerome Powell has consistently emphasized that the key to eventual rate cuts would be an ongoing picture “good” economic data showing an approach to a 2% inflation rate over a longer period, like 12 months.However, “recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence,” Powell said.And, as IPA Capital Markets noted, there is only so long the industry and investors can or should stand still. It said that often new construction coming out of lease-up now is trading below replacement costs in a high-5% to low-6% cap range in most markets.