Recent optimism that the CRE investment market had hit bottom and was primed for a rebound has begun to wane within the past few weeks as a backup in the Treasury has essentially paused dealmaking.
Yields on 10-year Treasuries have recently increased on stronger-than-expected economic data, causing uncertainty about future rate cuts. While CRE investments won't grind to a halt, investors are pausing to evaluate how much rates might continue to drop and at what pace before they commit to new deals, said Madison Realty Capital co-founder Josh Zegen during an interview on Bloomberg TV.
"It's very hard for investors to make a market between a 3.5 and a 4.5 Treasury," said Zegen. "They really need more of a tight band with four to six months of consistency to start committing to new deals, and that's a real challenge for the sector in general."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
