We all could use an extra $800,000

Santa came early for some commercial real estate owners who locked a rate in the past week.   The 10YR US Treasury yields dipped then rallied last week, declining to 4.11% before bouncing back to current levels near 4.25%.  Is this dip and then increase back to the prior week’s levels a sign of a new normalization?  

If so, commercial real estate owners will be sharpening their pencils to rework their debt stacks and determine how much more cash they will return or less equity they may need to raise on financings. Today, owners are being offered around eight percent more in loan proceeds since October; however, those standing on the sidelines may see this windfall disappear if yields bounce back to October levels



As many CRE owners are gauging when to refinance, we will all be glued to Fed Chairman Powell’s press conference on Wednesday.