As the first quarter comes to an end, to say 2022 has already been an eventful year is an understatement. Even though the uncertain future of the office sector has pushed lenders interest to new lows, overall CRE mortgage activity remains steady. After surpassing the 2.00% mark in February, the 10-Year Treasury exploded to as high as 2.50% - its highest since Q2 of 2019. As the treasury index continues to climb, CRE borrowers can expect adjustments on spreads and higher interest rates for long term fixed rate debt. Additionally, cap rates are tied to interest rates and property valuations will eventually adjust.
One quarter in the books, three more to go. What does quarter number two have in store?