With all the negative news about the residential loan markets and the fact that some of that “bleeds
through” to the commercial loan markets it is nice to hear some good news about commercial loans.Â
As investors who formerly bought bonds backed by residential loan portfolios have “fled to safety” in
the form of U.S. Governmernt Securities they have driven the prices of those securities up and the
yields down. One of those securities represented by the 10 Year Treasury Index has fallen from a
rate of over 5.00% to 4.00% in the last few months. Since the rates on most commercial real estate
loans over $1,000,000 are based on this 10 year index this has kept the rates lower than they might
otherwise have been if the index had remained at 5.00% or higher. The good news is that this is
generally a good time to be shopping for commercial real estate loans.
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