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 2026
• Fed 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 assets
• Underwriting 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 elevated
• Higher Financing Costs Permanent — All-in coupons: 5.5-6.5% (core), 6.5-8%+ (transitional); 150-250 bps above pre-pandemic
• Cap Rates Won't Compress — Flat to higher bias; exit assumptions must reflect this reality
• Refinancing 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!