Robert Kurtzman

Economist: Board of Governors of the Federal Reserve System, CV

Research Agenda: My research examines topics in commercial real estate (CRE) financing and investment using methods from corporate finance and macroeconomics (firm dynamics, financial frictions). I also have work examining the aggregate costs of different financial frictions, the role of unconventional policies in the economy, and the effects of bank capital requirements on CRE construction lending.

Please Note: The views expressed are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System or of anyone else associated with the Federal Reserve System.

Recent Updates:

(1) I'll be presenting my work with Sean Flynn and Alexei Tchistyi on mortgage rate lock-in in CRE in this session at the AFAs, and my coauthor David Glancy will present our work on the determinants of recent CRE distress for banks in this session at the AEAs, both on January 5th.

(2) I have a new paper with Fed coauthors putting forth a method for forecasting the aggregate impact of data center investment on the economy (see below).

Active Working Papers

(5) Estimating Aggregate Data Center Investment with Project-level Data, with Eirik Brandsaas, Daniel Garcia, Joe Nichols, and Adi Zytek (Fed RA)

Summary: Data center investment in the U.S. has increased rapidly in the post-pandemic era, and plans for future investment have surged further. We develop a straightforward method to forecast aggregate investment using project-level microdata and a small number of parameters: specifically, abandonment rates, time from plan-to-start, and time from start-to-completion. As a key validation of our approach, we generate estimates that match the recent history of aggregate data center investment in the NIPAs. We then use our method to generate nowcasts of aggregate data center investment in the short run, with the mean forecast indicating that investment will increase to $370 billion annualized by 2026:Q2. We can extend our methodology further out, but our forecasts then become conditional on the assumed flow of new data center plans. Assuming future plans range from one-fourth to twice the average pace of plans from 2024-2025 implies a range of investment forecasts of $360 billion to $930 billion in 2027, demonstrating the substantial upside and downside risks to future levels of investment.

Research Areas: CRE

(4) Does Mortgage Rate Lock-in Dampen Commercial Real Estate Busts?, with Sean Flynn and Alexei Tchistyi

Summary: We show that mortgage lock-in effects play a significant role in the commercial real estate market. Using data on securitized commercial mortgages, we find a 17% reduction in the probability of sale for the average property when market interest rates are 100bp above the fixed rate on the mortgage. The increase in sales price for locked in properties is approximately 4%. These effects are not driven by financially distressed properties, differences in liquidity across markets, or differences in owner types. Our estimates suggest that the lock-in effect likely mitigated price declines by around 8% in the recent bust.

Recent Slides; Research Areas: CRE

(3) Determinants of Recent CRE Distress: Implications for the Banking Sector, with David Glancy, Revising to Resubmit at Management Science

Summary: Using detailed micro-data on banks' portfolios, we show that small banks’ comparatively modest delinquency rates mostly reflect observable portfolio characteristics—predominantly their low holdings of large-sized office loans—rather than unobserved factors like extension or modification tendencies.

Recent Slides; Research Areas: CRE; Media: Trepp; Video of David's Talk at the Boston Fed Stress Testing Conference (start at 3 hours 51 minutes 30 seconds)

(2) Aggregate Implications of Deviations from Modigliani-Miller: A Sufficient Statistics Approach, with David Zeke

Summary: Develops a sufficient statistics approach to identify the aggregate consequences of distortions to firm investment in a class of general equilibrium models that can accommodate rich general equilibrium effects such as endogenous firm entry.

Recent slides; Research Areas: Estimating the aggregate costs of different financial frictions

(1) The Economy-Wide Gains from Resolving Debt Overhang, with David Zeke; Online Appendix

Summary: Debt overhang induces private costs near default for incumbents. In equilibrium, resolving debt overhang reduces entry and increases the leverage of entrants.

Research Areas: Estimating the aggregate costs of different financial frictions

Academic Journal Publications

(10) JUE Insight: Shovel Ready Projects and Commercial Construction Activity's Long and Variable Lags, with David Glancy and Lara Loewenstein, 2026.

Journal of Urban Economics, Volume 151, January 2026, https://doi.org/10.1016/j.jue.2025.103816

Summary: Using unique microdata on over 200,000 commercial construction projects that includes a panel of the phase history for each project, we present evidence on the significant number of abandonments out of planning and their state dependence. A model built to be consistent with these findings has the testable implication that supply is more elastic when there are more “shovel ready” projects available to advance to construction. We use local projections to validate that this prediction holds in the cross-section for U.S. cities.

.bib file; Research Areas: CRE

(9) The Value of Renegotiation Frictions: Evidence from Commercial Real Estate, with David Glancy and Lara Loewenstein, 2025.

Journal of Financial Intermediation, 62 (Apr), https://doi.org/10.1016/j.jfi.2025.101144.

Summary: Develops a tradeoff theory model in which lenders vary in their modification technologies that is consistent with facts on modification and delinquency rates in the commercial real estate market. In equilibrium, the calibrated model also produces higher LTVs and spreads for CMBS relative to portfolio lenders, consistent with the data. Model counterfactuals demonstrate the heterogeneous effects of reducing modification frictions at CMBS.

.bib file; Research Areas: CRE; Media: Inside Mortgage Finance

(8) CRE Redevelopment Options and the Use of Mortgage Financing, with David Glancy and Lara Loewenstein, 2025.

Real Estate Economics, 53(5): 1138-1169. https://doi.org/10.1111/1540-6229.12510

Summary: Guided by a model where aging properties have the option to be redeveloped at a cost, we construct a measure of redevelopment option values and show that buyers use mortgage financing based on the estimated redevelopment option and the purchaser’s experience in renovation or construction activity. These effects grew in magnitude during the pandemic, consistent with COVID-19 increasing the importance of renovation and redevelopment options, in particular for office properties.

.bib file; Research Areas: CRE

(7) Recourse as Shadow Equity: Evidence from Commercial Real Estate Loans, with David Glancy, Lara Loewenstein, and Joe Nichols, 2023.

Real Estate Economics, 51(5): 1108-1136.

Summary: Recourse loans are allowed lower loan rate spreads and higher LTVs, consistent with recourse reducing default risk. Recourse also affects loan modification negotiations by providing additional bargaining power to the lender. Loans with recourse were half as likely to receive accommodation during the COVID-19 pandemic.

.bib file; Research Areas: CRE

(6) Intermediary Segmentation in the Commercial Real Estate Market, with David Glancy, John Krainer, and Joe Nichols, 2022.

Journal of Money, Credit and Banking, 55(4): 2029–2080.

Summary: Develops a model that can match novel facts on the loan portfolios of bank and nonbank lenders in the commercial real estate market. Examines implications for how the market responds to supply shocks and regulations.

.bib file; Research Areas: CRE

(5) Did QE Lead Banks to Relax their Bank Lending Standards? Evidence from the Federal Reserve's LSAPs, with Stephan Luck and Tom Zimmermann, 2022.

Journal of Banking and Finance, 138 (May).

Summary: Exploits banks’ differential exposure to MBS prior to QE1 and QE3 to examine the extent to which QE1 and QE3 affected lending standards and risk-taking.

.bib file; Research Areas: Effects of unconventional policies; Media: Hutchins Roundup

(4) Across the Universe: Policy Support for Employment and Revenue in the Pandemic Recession, with Ryan Decker, Byron Lutz, and Chris Nekarda, 2021.

American Economic Association: Papers & Proceedings, 111:267–271.

Note: Papers & Proceedings volumes are not peer reviewed.

Summary: Develops comprehensive estimates of the universe of economic activity to characterize how four government direct lending programs—the Paycheck Protection Program, the Main Street Lending Program, the Corporate Credit Facilities, and the Municipal Lending Facilities—relate to economic activity in the United States.

.bib file; Research Areas: Effects of unconventional policies; Other Information: Video Link to Andreas Lehnert discussing this work's impact (3:17:10-3:19:17), Longer working paper that also examines how our estimates compare to alternative data sources available as FEDS Working Paper 2020-099.

(3) How do Capital Requirements Affect Loan Rates? Evidence from High Volatility Commercial Real Estate, with David Glancy, 2021.

Review of Corporate Finance Studies, 11(1):88--127.

Summary: The HVCRE rule passed through to loan rates. For each one percentage point increase in required capital, loan rates increased by about 10 basis points. This elasticity is an important input into models performing cost/benefit analyses of increasing capital requirements.

.bib file; Research Areas: CRE, bank capital requirements

(2) Misallocation Costs of Digging Deeper into the Central Bank Toolkit, with David Zeke, 2020.

Review of Economic Dynamics, 38:94–126.

Summary: Central bank large-scale purchases of private assets can have different effects on the allocation than purchases of government assets.

.bib file; Research Areas: Effects of unconventional policies; Media: Bloomberg, Centralbanking.com

(1) Poker Player Behavior After Big Wins and Big Losses, with Gary Smith and Michael Levere, 2009.

Management Science, 55.9:1547–1555.

Summary: Poker players tend to play less cautiously after a big loss.

.bib file; Research Areas: behavioral economics (pre-PhD work)

Policy Notes

(6) Trends in Credit Unions' Share of U.S. Private Depository Lending, with Hannah Landel. FEDS Notes. Washington: Board of Governors of the Federal Reserve System, January 31, 2025, https://doi.org/10.17016/2380-7172.3697.

(5) From Plans to Starts: Examining Recent Trends in Manufacturing Plant Construction, with Eirik Eylands Brandsaas and Joseph Nichols. FEDS Notes. Washington: Board of Governors of the Federal Reserve System, January 14, 2025, https://doi.org/10.17016/2380-7172.3667.

(4) From-Whom-to-Whom Relationships in the Financial Accounts of the United States: A New Methodology and Some Early Results, with Michael M. Batty and Elizabeth Holmquist, FEDS Notes. Washington: Board of Governors of the Federal Reserve System, March, 24, 2023, https://doi.org/10.17016/2380-7172.3273.

(3) Accounting for COVID-19 Related Funding, Credit, Liquidity, and Loan Facilities in the Financial Accounts of the United States, with Matthew Hoops, FEDS Notes. Washington: Board of Governors of the Federal Reserve System, July 30, 2021, https://doi.org/10.17016/2380-7172.2956.

(2) An Aggregate View of Bank Lending Standards and Demand, with David Glancy and Rebecca Zarutskie, FEDS Notes. Washington: Board of Governors of the Federal Reserve System, May 04, 2020, https://doi.org/10.17016/2380-7172.2546.

(1) Changes in Monetary Policy and Banks' Net Interest Margins: A Comparison across Four Tightening Episodes, with Jared Berry, Felicia Ionescu, and Rebecca Zarutskie. FEDS Notes. Washington: Board of Governors of the Federal Reserve System, April 19, 2019, https://doi.org/10.17016/2380-7172.2352.

Resting Papers

Accounting For Productivity Dispersion over the Business Cycle, with David Zeke

Summary: Accounting decompositions of changes in aggregate productivity ratios that can assess the contribution of changes in the mean and dispersion of firm-level productivity ratios. Most movements in past U.S. business cycles are driven by changes in the mean of firm-level productivity ratios.

Google Sites

Report abuse