When the 10-year Treasury yield declines, it might initially seem like a positive development. Lowering the risk-free portion of longer-term interest rates should, in theory, make financing more accessible. However, this shift comes amidst a wave of uncertainty engulfing the U.S. financial system and economy, leaving many in the commercial real estate sector cautious.
On the bright side, some immediate benefits are already apparent. Louis Adler, co-chief executive officer at REAL New York, highlights this optimism: “Projects that were previously shelved due to tighter debt markets might now start to move forward again,” he told GlobeSt.com. “Developers who were sidelined by rising rates are re-running their numbers.” This renewed activity suggests that falling yields could breathe life into projects previously deemed unfeasible.
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