January 2026 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 December, the 5-year U.S. Treasury yield averaged approximately 3.62%, with daily closes fluctuating between 3.62% and 3.78%. This marks a slight decline from November’s average of 3.66%, signaling continued stabilization in the rate environment as markets digest prior policy adjustments.
Market Outlook
As we close out 2025, the 5-year Treasury is expected to remain near the 3.60%-3.65% 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 6.40%, depending on asset type and deal structure. Multifamily properties typically secure the most favorable terms around the 5.5% range, while office, retail, and industrial assets fall in the 6.0%-6.5% range.
Contact our Small Business Team to see what we can do for you.
Read our December Market Rate Update.
Rates from Resource Center | U.S. Department of the Treasury as of December 31, 2025.
