Great rates available, but tapering may cause volatility

<h1><span style="font-weight: 400;">CRE Capital Markets Snapshot Report</span></h1> <p><strong>Ten-year Treasury:</strong> <span style= "font-weight: 400;">Range-bound last week 1.28 - 1.38. Will likely continue this way until news on tapering begins. Also, a dozen central banks are meeting this week.</span></p> <p><strong>Short-term Rates:</strong> <span style= "font-weight: 400;">LIBOR is continuing to trade around eight basis points. One-month SOFR is slightly lower than one month LIBOR, trading at 5.¾ basis points. BSBY (the only credit-sensitive rate with any liquidity in the market) is trading on top of Term SOFR, at six basis points. </span></p> <p><span style="font-weight: 400;">Looking at where these indices would swap to, for clients looking to hedge exposure to floating rate, one-month LIBOR and BSBY are trading right on top of each other at about 83 basis points for a five-year swap. SOFR swaps in the five-year sector are trading around 71 basis points, which is about 10 to 12 basis points lower than the new credit- sensitive rates.</span></p> <p><strong>CMBS and CLO Markets:</strong> <span style= "font-weight: 400;">Strong volume coming up towards the end of Q3 and Q4. The big part of the curve that Thirty Capital is looking at is the five-year end range, which really impacts the exit costs for fixed rate, yield rate, and defeasance. The market is at the highest level it's seen over the summer and around 50 to 60 basis points higher year-on-year. </span></p> <p><strong>Retail and Hospitality:</strong> <span style= "font-weight: 400;">Around 1.85 to 2.10 over ten-year swaps, so investors can get in at around 3% for first and retail deals. Hospitality is around the 2.25 to 2.50 range. </span></p> <p><span style="font-weight: 400;">Overall, there’s a lot of flexibility for lenders at fairly attractive rates. </span></p>