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Rising 10-year yields chill commercial real estate dealmaking

Lenders and investors pointed to the 10-year Treasury rate hitting 5.3% this week, its highest level since 2002, after a sharp quarterly run-up.

Reported · Written up by our desk · Commercial

Soaring 10-year Treasury yields are dampening commercial real estate sentiment, with lenders and investors saying the market’s dealmaking recovery is running out of steam, according to Bisnow.

Bisnow reports the 10-year yield reached 5.3% on Wednesday afternoon, the highest level since 2002, amid what it describes as the benchmark’s biggest quarterly increase since 1994.

Industry leaders say the speed of rate increases is making previously workable deals harder to finance and price. AEW Capital Management Chief Operating Officer Lauren O’Neil said the volatility is particularly harmful, noting that rates jumped 75 basis points in about 30 days.

Bisnow also reports that as lenders pump the brakes, a deal stalemate could jeopardize the broader recovery investors have been betting on.

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