Talk Your Book: How Higher Rates Are Re-Shaping Commercial Real Estate

Rising long-term rates are forcing a real estate capitulation that favors well-capitalized credit investors over equity holders, especially in office.

• Rate shock reshapes CRE: With the 10-year Treasury "ripping," Jerry Baglien says it's slowing transaction volume, making refis trickier, and pressuring valuations across the board.
• Credit over equity: Baglien favors real estate credit now, citing 30-40% equity cushions before losses hit, and a 3-5 year levered mortgage strategy that beats simple treasury yields.

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