Welcome back to What's Hot & What's Not 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; settling into 4.2-4.5% range through 2026
• Fed Easing Slowly — 2-3 cuts in 2025, another 2-3 in 2026; fed funds gliding to 3.0-3.5%
• Spreads Historically Tight — Good news for well-capitalized borrowers refinancing stabilized assets
• Underwriting Clarity — Base case: 4.25-4.5%; stress test at 5%

• Sub-3% Yields Gone Forever — Structural deficits and sticky inflation keeping rates elevated
• Higher Financing Costs Permanent — All-in coupons: 5.5-6.5% (core), 6.5-8%+ (transitional)
• Cap Rates Won't Compress — Flat to higher bias; adjust exit assumptions
• Refi Risk Elevated — 2020-2022 floating-rate debt facing serious pressure

❄️ 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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