CRE Blurb | October 17, 2026

The Brief

A growing share of troubled commercial mortgages is being handed to workout specialists, a warning for lenders. Yahoo Finance
A Swedish private equity giant bought a US real estate firm, expanding fast into American property. Commercial Observer
Analysts warn the rush to lease AI computing power may be a bubble that could pop. BigGo Finance

Market Snapshot

10-Year Treasury: 5.09%-1 bps; Benchmark for long-term property loans
SOFR: 3.89%+1 bps; Base rate for floating-rate property loans (as of Oct 15)
Real estate stocks (VNQ): $91.76+0.3%; A fund holding about 150 REITs

Rates as of Oct 16 close. Full market data

Week in Review

The share of CMBS loans in special servicing climbed to 11.49%, the highest since 2013. CMBS are bonds backed by commercial mortgages, and special servicing means a loan is in trouble and sent to a workout team. Yahoo Finance.

EQT Real Estate, the property arm of Swedish buyout firm EQT, bought Stockbridge, a US firm managing $16.5 billion in assets, for $375 million. Buying a manager is a fast way to grow holdings. Commercial Observer.

Separately, EQT agreed to a $27 billion gross asset value deal to expand in industrial and other sectors. Gross asset value counts the properties' full worth before any debt. GlobeSt.com.

Market Spotlight

Offices are the week's clear stress point. Office loans bundled into CMBS reached a 12.2% delinquency rate, meaning about one in eight is behind on payments, topping the 2008 crisis peak. Hokanews. High vacancy and expensive debt leave many towers worth less than their loans, so owners stop paying and hand back the keys. The picture is not all grim. In Chicago, the Zara founder paid $550 million for a trophy tower, one of the year's largest office trades. Bisnow. "Trophy" means the best building in a market, and well-located, high-quality towers still attract deep-pocketed buyers, while older or half-empty ones struggle to refinance. Lenders watching these numbers will keep office loans scarce and pricey, squeezing weaker owners further.

AI in Real Estate Weekly

TeraWulf is pivoting from bitcoin mining to leasing AI data centers, signing $27 billion in long-term contracts. Data centers are warehouses of computers that run AI, and leasing them is now steadier money than mining crypto. Pluang. In Dublin, AI firms are snapping up office space, a bright spot for landlords as AI tenants expand their headquarters. Business Post. Not everyone is convinced the boom lasts. Research firm Gartner warns the scramble to rent AI computing power looks like a bubble, predicting 80% of new cloud providers could be wiped out. BigGo Finance. For real estate, that matters because data center demand drives huge construction and power deals, so a deflating bubble could leave some buildings empty.

The Numbers

Every number is filled in automatically from public data.

Rates

10-Year TreasuryBenchmark for long-term property loans: 5.09%-1 bps
5-Year TreasuryBenchmark for many 5-year commercial mortgages: 4.89%-2 bps
2-Year TreasuryTracks where the Fed is expected to set rates: 4.74%-3 bps
10Y-2Y curveNegative = short-term rates above long-term, often a slowdown signal: 35 bps+2 bps
SOFRBase rate for floating-rate property loans (as of Oct 15): 3.89%+1 bps
Fed FundsThe Fed's target for overnight bank lending; other rates key off it: 3.75% to 4.00%0 bps
30-Year Mortgage30-year home mortgage rate (Freddie Mac); a housing-demand gauge, not a CRE loan rate (as of Oct 15): 7.40%0 bps

Rates as of Oct 16 close.

Line chart of the 10-Year Treasury yield, from 4.77% on Sep 3 to 5.09% on Oct 16. — 10-Year Treasury yield, last 45 days.

Line chart of Treasury yields by maturity. On Oct 16: 2Y 4.74%, 5Y 4.89%, 10Y 5.09%, 30Y 5.43%. A month ago (Sep 16): 2Y 4.74%, 5Y 4.86%, 10Y 5.01%, 30Y 5.35%. — Treasury yields by maturity, latest close vs. a month ago. Upward slope = longer loans cost more.

Line chart of the 30-year mortgage rate over the last six months, from 6.23% on Apr 23 to 7.40% on Oct 15. — 30-year mortgage rate, last six months (Freddie Mac).

Federal Reserve

FOMC: next Fed meetingWhen the Fed next decides on rates: Oct 28
Odds of a cutChance rates go down. Prediction-market odds from Polymarket traders: 0.5%
Odds of a holdChance rates stay the same: 85.8%
Odds of a hikeChance rates go up: 13.7%

Kalshi: hold 85.2%

Stacked bar of prediction-market odds for the Oct 28 Fed meeting: cut 0.5%, hold 85.8%, hike 13.7%. — What prediction markets expect at the next Fed meeting. Odds as of Oct 17.

REITs

Real estate stocks (VNQ)A fund holding about 150 REITs: $91.76+0.3%
Biggest gain todayOwns Los Angeles and Honolulu offices and apartments: Douglas Emmett (DEI)+1.7%
Biggest drop todayOwns West Coast offices and studios: Hudson Pacific Properties (HPP)-7.8%
REIT dividend yieldYearly income per $100 invested in VNQ: 3.80%
REIT yield vs. 10-Year TreasuryBelow zero: Treasuries out-yield REIT dividends, so REITs look pricey vs. bonds: -129 bps

Term of the Day

Preferred return

The minimum yearly return investors must receive before the sponsor (the person running the deal, called the general partner) starts sharing in profits. Say a fund promises an 8% preferred return. Investors collect their 8% first, and only then does the sponsor take a cut. It aligns everyone, because the sponsor earns extra only after investors are paid.

Data Room

Slower-moving credit data. Rows marked Updated changed since the last issue.

High-yield spread (Oct 15) UpdatedExtra interest risky companies pay over Treasuries; higher = lenders more nervous: 3.23%-2 bps
Bank CRE loans (Oct 7)Total commercial property loans banks hold: $3,155B+0.2%
Bank CRE delinquency (Q2 2026)Share of banks' commercial property loans that are behind on payments: 1.53%-3 bps
CMBS delinquency (Sept 2026)Share of commercial property loans in bonds that are behind on payments: 8.02%+17 bps

Data checks: REIT prices came from a single source today. Treasury yields matched across FRED and Treasury.gov. Fed odds in line with Kalshi.

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