Episode 3: Interest Rate Watch — 10-Year Treasury Outlook

What this episode covers

Welcome back to What's Hot & What's Not in CRE — your daily pulse on commercial real estate in America.Today we're talking interest rates — specifically, what the 10-year Treasury is doing and what it means for CRE financing heading into 2026.🔥 What's Hot:Rate Stability in Sight — 10-year peaked at 4.79% in Jan 2025; now settling into 4.2-4.5% range through 2026Fed Easing Slowly — 2-3 cuts expected in 2025, another 2-3 in 2026; fed funds gliding to 3.0-3.5%Spreads Are Tight — Credit markets historically tight for well-capitalized borrowers with quality assetsUnderwriting Clarity — Base case: 10-year at 4.25-4.5%; stress test at 5%No Return to Low Rates — Sub-3% long-term yields are over; structural deficits and sticky inflation keeping yields elevatedHigher Financing Costs Permanent — All-in coupons: 5.5-6.5% (core), 6.5-8%+ (transitional); 150-250 bps above pre-pandemicCap Rates Won't Compress — Flat to higher bias; exit assumptions must reflect this realityRefinancing Risk Elevated — Assets with 3-4% cap rates and 2020-2022 floating-rate debt face serious refi risk❄️ What's Not:Bottom line: Rates are stabilizing, but higher-for-longer is here to stay. Underwrite accordingly.Thanks for tuning in. See you tomorrow!

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