March 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.
Stabilizing Treasury Yields Continue to Support Attractive Commercial Real Estate Financing Conditions
Treasury Market Overview
The 5‑year U.S. Treasury yield remained stable through February, trading mostly in the 3.50%–3.85% range.
Daily closing data for February show yields clustering around the mid‑3% level, with an average of approximately 3.66%. Overall, February continued the pattern seen in January: a calm, steady Treasury environment with moderate downward drift in volatility and a supportive backdrop for borrowers.
Market Outlook
As we move into March and early Q2, the 5‑year Treasury is expected to hover near the 3.60%–3.75% range, assuming inflation remains on its current trajectory, and the Federal Reserve maintains its wait‑and‑see posture. February’s yield pattern suggests ongoing market confidence and a neutral‑to‑favorable rate environment for new financing.
Implications for Commercial Real Estate (CRE) Financing
1. Treasury Stability Continues to Support Borrowing Costs
With 5‑year yields holding well below their 2025 highs, financing conditions remain structurally attractive across most property types. This stability has allowed lenders to remain aggressive, especially on well‑underwritten deals.
2. CRE Pricing Remains Competitive
Commercial real estate loans, priced as a spread over Treasuries, continue to benefit from benchmark environment. Borrowing costs remain appealing compared to year‑ago levels, improving the economics of acquisitions, refinances, and recapitalizations.
3. Flexibility Remains a Borrower Priority
Many clients continue to favor structures with shorter initial fixed periods, refinance options, or hybrid rate features.
4. Current Loan Rate Landscape (Early 2026)
Lenders continue to emphasize credit quality, cash-flow durability, and market resilience—yet spreads remain competitive in nearly all sectors.
| Asset Class | Typical Pricing | Notes |
| Multifamily | 5.75% - 6.25% | Most favorable terms due to liquidity, agency support, and strong fundamentals |
| Industrial Retail Office | 5.50% - 6.00% | Pricing department on sponsor strength, leverage, asset quality, and market |
What This Means for You
If you are considering acquisition financing, refinancing, or portfolio restructuring, the current rate environment offers an advantageous window. February's consistent Treasury behavior provides a strong foundation for predictable, well-priced loan execution.
Contact our Small Business Team to see what we can do for you.
Read our February Market Rate Update.
Rates from Resource Center | U.S. Department of the Treasury as of March 9, 2026.
