The commercial real estate (CRE) market has been aware of the London Interbank Offered Rate (LIBOR) retirement since 2015, three years after a LIBOR price-manipulation scandal soured regulators on the interest rate and led them to push for a replacement. As a result, the Alternative Reference Rates Committee (AARC) assembled in 2017 to select the Secured Overnight Financing Rate (SOFR) as the official LIBOR replacement.
The AARC’s assembly has since triggered a series of events leading to the LIBOR cessation and SOFR adoption. Though the timeline has been gradual, the official transition from LIBOR to SOFR is in full effect with less than a year left to comply.
