Is this a turning point for CRE markets?
Capital Targeting CRE Investment Increasing
- Pent-up dry powder being deployed into CRE assets
- Asset performance remains healthy, aside from some office segments
Yield Spread Widening Across CRE Sectors
- The average overall CRE cap rate rose 90 basis points since 2022, to 6.7%
- The gap between the 10-year treasury and CRE cap rates expanded to its widest level since 2022
Cost of Debt Capital Coming Down
- The probability of a September rate cut by the Fed is a near certainty according to Wall Street
- Lenders are beginning to reduce their spreads over the basis as the risk of rate increases diminishes
- Share of lenders tightening their lending standards at lowest level since the second quarter of 2022
*Through August 14
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics, Federal Reserve
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