What happens if long bonds don't come down for the next 5-10 years and what are the consequences for RE?
I've spoken to quite a few shops who are considering recaps and are so incredibly confident that rates come down and they can refinance ( some even said this summer). Why is this the assumed? Isn't there a small chance that the fed cuts rates and inflation expectations are higher so long bonds actually go up or stay flat? Can the fed truly start QE with where we're at?
Let's say long bonds increase and we see a 10yr at 5% for the next 5+ years. What would that mean for CRE? Are we going to see an implosion from lenders and operators that have been praying for rate cuts? Additionally, does CRE space stay suppressed in terms of hiring and capital allocation as capital goes to other places with a higher yield?
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