December Market Rate Update
Each month, the IAACU Small Business Team aims to provide you with insights into current trends in commercial real estate market rates, which are influenced by movements in the U.S. Treasury yield.
Market Overview: Treasury Yields Show Continued Easing
In November, the 5-year U.S. Treasury yield averaged approximately 3.66%, with daily closes fluctuating between 3.55% and 3.77%. This represents a modest decline from October’s average of 3.70%, signaling continued stabilization in the rate environment as markets absorb prior policy adjustments.
Market Outlook
As we approach year-end, the 5-year Treasury is projected to remain within the 3.60% to 3.75% range, assuming no significant changes in inflation trends or Federal Reserve policy. Overall, the market appears to be settling into a neutral stance amid ongoing fiscal uncertainties.
Implications for Commercial Real Estate Financing
With Treasury yields trending lower, financing conditions for commercial real estate remain competitive. Lenders are actively seeking well-structured deals, particularly those supported by strong credit and reliable cash flow. Current rates for high-quality transactions generally range from 5.46% to 6.70%, depending on asset type and deal structure. Multifamily properties typically secure the most favorable terms around 5.50% range, while office, retail, and industrial assets fall in the 6.00%–6.50% range.
Contact our Small Business Team to see what we can do for you.
Read our November Market Rate Update.
Rates from Resource Center | U.S. Department of the Treasury as of December 3, 2025.
Chart from Market Watch.
