Lowest 10-year treasury rates in history provide a unique opportunity

Last week the yield on the 10-year treasury, a general benchmark for 10 year fixed loans, went below 1.36%, for the first time ever. Volatility in the equity markets, driven partly by the unquantifiable effects of the COVID-19 virus on the global economy, has caused capital to buy treasuries in a flight to quality. Due to the increased buying of treasuries the yields on the 10-year treasury dipping below 1% in the last few days and closed today at an all-time low of .914%. The unprecedented chaos in the market has provided borrowers an opportunity to take advantage of some of the lowest interest rates in history. Due to the quick drop in the treasuries, many lenders are instituting floor rates, and are struggling to decipher whether these new treasury yields will continue in the future. The floors are ranging from the high 2% range to the low 3% range for 10 year fixed rates and longer on quality commercial real estate assets.

Contact us to see if you may be able to take advantage of this unique time in the market.