Bond Yields Are Steering the Volatility in CRE Values

Movements in bond yields are now the dominant force behind commercial real estate pricing—often outweighing the influence of GDP growth or inflation, especially in markets with tight cap rates. Bond yields as the main driver: Oxford Economics research shows that changes in yields exert a much stronger pull on valuations than traditional macro factors. For…

CBRE’s midyear broker survey—drawing from over 200 industry professionals—suggests that cap rates may have reached their ceiling in early 2025, despite the turbulence in Treasury yields. Market metrics: The 10-year Treasury yield swung widely this year, starting at 4.79% in January, dipping to 4.01% by April, and ending midyear at 4.24%. Even with that volatility,…