The 10-year Treasury yield reached 5.24% as of September 28, 2026, pushing commercial real estate borrowing costs higher even as lenders compete with lower spreads.
Key Takeaways
- The 10-year Treasury yield was 5.24% as of September 28, 2026.
- Long-dated Treasury yields remain elevated, creating higher borrowing costs for everyone and everything, driven by inflation, energy, enormous Treasury issuance, fiscal deficits, and heavy corporate (AI) issuance.
- The Fed has hiked its short-term rate by 0.25% to temper inflation. Stand by for more increases.
- Oil at $100+ a barrel is a double whammy for CRE: higher inflation means higher borrowing rates, and higher operating costs mean lower NOI.
- CRE lenders have plenty of capital, and competition is improving spreads. Lenders are willing to be aggressive and compete with lower spreads and favorable terms to win deals, but lower spreads are no longer offset by the recent Treasury and inflation shock pushing benchmark rates sharply higher.
- Fixed rates are not cheap but still attractive: it is hard to price anything under 6% in today’s positive rate environment.
Capital Market Indicators — September 2026
| Indicator | Reading | CRE Impact |
|---|---|---|
| 10-Year Treasury yield (as of September 28, 2026) | 5.24% | Higher borrowing costs |
| Fed short-term rate increase | 0.25% | More increases ahead |
| Oil price per barrel | $100+ | Lower NOI |
| Fixed-rate pricing | Under 6% | Hard to price |
Data as of September 28, 2026. Source: Kraus Team Capital Market Update, Kidder Mathews Debt and Equity Finance. Prepared by the Kidder Mathews Research Group.
Frequently Asked Questions
What is the 10-year Treasury yield as of September 28, 2026?
The 10-year Treasury yield was 5.24% as of September 28, 2026.
Why are long-dated Treasury yields elevated?
Long-dated Treasury yields remain elevated, creating higher borrowing costs for everyone and everything, driven by inflation, energy, enormous Treasury issuance, fiscal deficits, and heavy corporate (AI) issuance.
How does $100+ oil affect commercial real estate?
Oil at $100+ a barrel is a double whammy for CRE: higher inflation means higher borrowing rates, and higher operating costs mean lower NOI.
How are CRE lenders competing for deals right now?
CRE lenders have plenty of capital, and competition is improving spreads. Lenders are willing to be aggressive and compete with lower spreads and favorable terms to win deals.
Are fixed rates still attractive for commercial real estate borrowers?
Fixed rates are not cheap but still attractive. It is hard to price anything under 6% in today’s positive rate environment.
Content provided by Brad Kraus of the Kraus Team, part of Kidder Mathews Debt & Equity Finance group.