Episode summary
RE West 2026: Steve Biggs of The Mather Group Spoke to Courtney McQuade
Summary
Real estate recovery is still underway, but Stephen Biggs says it is progressing at a much slower pace than expected because higher rates have stayed in place longer than investors hoped. He argues that the Fed’s aggressive tightening in 2022 pressured prices and values, and now the market is adjusting to a higher-for-longer environment rather than an imminent rate-relief rebound. In his view, the delay is creating a healthier setup because new construction has slowed and less supply is coming online.
Biggs says his firm prefers the debt side of real estate today, especially senior loans and mezzanine or preferred positions, where investors can still earn attractive returns while waiting for the equity side to recover. He also sees better conditions in housing, especially in the Bay Area, where limited new development and continued demand have improved rents and the outlook for owners.
On data centers, Biggs draws a comparison to the fiber boom but says the cycle is not identical. He is cautious on the sector because demand is real, but technological obsolescence, power, water, and local backlash could limit the upside and soften the boom.
Key takeaways
- Stephen Biggs says the real estate recovery is still underway, but much slower than expected because rate relief has not arrived.
- Biggs favors real estate debt over equity right now, citing attractive yields on senior loans and mezzanine or preferred positions.
- He says higher rates have slowed new construction, which should support a healthier real estate cycle over time.
- Biggs sees a better housing backdrop in the Bay Area because supply has been limited and landlords can still get good rents.
- He is cautious on data centers, saying demand is real but obsolescence risk and resource constraints could cap the cycle.
Notable quotes
“I think yes, and the recovery is still underway. Certainly much slower pace than we thought”
“I think what it has set up is a better environment for the real estate market. There's less supply coming on online”
“So, I think the opportunity for that it may not last forever, but for the next couple years looks pretty good”
“And you know, landlords can get good rents. And there's uh you know, there's it's a much healthier environment for real estate owners”
“So, I think that will at least soften the cycle a little bit. Certainly with any cycle that you do eventually hit the end”
How the episode opens
A year ago it was said real estate would be making a comeback. Now with the Fed about to raise rates again, is that comeback still happening? I'm here at our Real Estate West Retreat in beautiful Half Moon Bay. With me, the one and only Steve Biggs, managing director and head of alternatives at The Mather Group. Steve, your take?
Uh well, thanks, Courtney. I think yes, and the recovery is still underway. Certainly much slower pace than we thought.
So, you know, the Fed was very aggressive in raising rates in 2022, put a lot of pressure on real estate prices and values. Uh and the expectation was that rates were going to then fall and um you know, real estate prices would rebound with the lower rates and and lower cap rates etc. What we're seeing is a much higher interest rate environment and I think the belief is that this will be with us for some time.
So, it doesn't look like that rate relief is coming anytime soon. But I think what it has set up is a better environment for the real estate market. There's less supply coming on online.
So, you know, new construction starts really slowed down with the higher rate environment. And I think what we have is setting up for a better, healthier, more fundamental real estate cycle. But it's just going to take some time.
It's a long cycle to develop. So, for investors with patience, it could be a really good time to invest.
I think you taught me higher for longer. — Higher for longer, yes. That's the the environment we're in now. — Well, and at this real estate forum, that's what everybody's going to be talking about. Can you tell me at The Mather Group, where does your next real estate dollar go?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- real estate recovery
- higher interest rates
- real estate debt vs equity
- data centers
- fiber boom
Companies and tickers mentioned
- The Mather Group
Watch the episode
Watch “RE West 2026: Steve Biggs of The Mather Group Spoke to Courtney McQuade” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Markets Group
-
The €3bn German Allocator Who Said No to Alternatives -
Two Stints as Interim CIO: Howard Hodel on Risk, Rebalancing and Reassuring the Board -
Stefan Beiner on Repo, Resilience, and Why Governance Beats Prediction in Pension Investing -
IF Great Plains 2026: Group Interview with Christine Giordano -
IF Great Plains 2026: Matt Clark of South Dakota Spoke to Christine Giordano -
IF Great Plains 2026: Ash Williams of J.P. Morgan Asset Management Spoke to Christine Giordano
Markets Group, this episode and its artwork belong to their owners. Octagon is not affiliated with the show; this page is an independent summary.
