The condition in Sacks’s prediction (“rates stay higher for longer instead of the big 2024–25 cuts people expected”) broadly came true, and so did the consequence (significant CRE distress spilling into regional banks).

• Fed kept rates elevated vs. early‑2024 expectations. In early 2024, markets were pricing multiple cuts; consensus shifted from ~six cuts to “maybe three,” a shift widely described as a higher‑for‑longer path that would squeeze smaller banks and CRE borrowers. (cnbc.com) In reality, the Fed held the policy rate at 5.25–5.50% through mid‑2024 and its June 2024 projections reduced planned cuts to just one that year, with the funds rate still projected at ~4.1% in 2025. (gold-eagle.com) By early 2025 the target rate was still 4.25–4.50%, well above the Fed’s estimated long‑run level (~3%), and only in late 2025 had it been nudged down to around 4–4.25%. (reuters.com) That is a prolonged period of elevated policy rates relative to what markets and the Fed’s own March 2024 dots had anticipated.

• Commercial real estate experienced clear, quantifiable distress. U.S. commercial mortgage delinquencies jumped from 2.94% in January 2023 to 4.66% in January 2024, largely driven by office properties; office delinquencies more than tripled year‑over‑year to 6.3% and coincided with record office vacancy rates. (investopedia.com) Through 2024 and into 2025, CMBS data show a sustained and worsening stress regime: by December 2024 overall CMBS delinquency had risen to 6.57%, with office delinquency above 11%, the highest since Trepp began tracking in 2000. (commercialsearch.com) In 2025, distress intensified further: CRED iQ reported an overall CMBS distress rate of 11.5% in January 2025, with office distress at ~17.7%, (commercialobserver.com) and Trepp’s office CMBS delinquency rate later hit ~11.7%, surpassing even the worst of the Global Financial Crisis. (wolfstreet.com) These are historically high stress levels by any reasonable standard.

• That CRE stress did, in fact, extend into the regional banking system. Regulators closed Republic First Bank, a Philadelphia‑based regional lender with about $6 billion in assets, on April 26, 2024. The FDIC and AP described it as the first U.S. bank failure of 2024 and explicitly tied it to the ongoing strain on regional banks from rising interest rates and declining commercial real‑estate values, especially offices with high vacancies. (apnews.com) New York Community Bancorp, another regional bank with large CRE exposure, reported a $327 million Q1 2024 loss driven by sharply increased provisions for credit losses on its commercial real‑estate book, leading Fitch to downgrade it and cite elevated CRE‑related loan‑loss expectations. (reuters.com) NYCB subsequently required over $1 billion in new capital and embarked on major layoffs and asset sales to stabilize after CRE‑linked losses and integration pressures, a restructuring widely reported as a response to CRE stress. (apnews.com) Sector‑wide, PIMCO and others warned that high rates plus depressed CRE values were likely to cause more regional bank failures, specifically because regionals had concentrated CRE loan books. (moneycontrol.com) FDIC data through Q3 2025 show elevated past‑due rates in non‑owner‑occupied CRE loans relative to pre‑COVID norms and dozens of “problem banks,” even as headline industry profits recovered. (reuters.com) Alongside a few additional small bank failures in 2025 and a wave of regional‑bank M&A (for example, Fifth Third’s agreed acquisition of Comerica to bolster scale and stability after the 2023 crisis), this indicates ongoing, non‑trivial regional‑bank stress linked to asset‑quality and funding pressures. (reuters.com)

Taken together: (1) the Fed did keep policy rates elevated longer than early‑2024 expectations, and (2) commercial real estate has suffered historically high delinquency and distress rates that (3) have already produced at least one notable regional‑bank failure tied in part to CRE, plus heavy losses, capital raises, and consolidation pressure at other regionals. That matches Sacks’s qualitative claim that “if rates stay higher, longer” there would be “real distress” in CRE, “including in the regional banking system.” Hence the prediction is best scored as right rather than inconclusive or wrong, even though the damage has so far been significant but not fully systemic.