Quick intro for those who don't know me yet. I've been working in commercial real estate since 2006. I started with appraisal, moved to CRE lending with Wells Fargo, and then into debt and equity brokerage in 2012 with HFF who eventually was acquired by JLL in 2019. I joined IPA today to focus on debt and equity placement across the country and will be based out of their office in Palo Alto, CA. In February, I started a podcast called "Recap with Brandon Roth" where I interview CRE capital providers about their company, buckets of capital, how they're sizing and pricing deals, market outlook, etc. You can find it here: Spotify - open.spotify.com/show/4n6oBf… Apple - podcasts.apple.com/us/podcas… Lastly, I've been writing a capital markets email every ~3 weeks where I talk about the latest changes to interest rates and why, recent quotes, lender conversations, etc. If you're interested in checking it out, you can subscribe at RothRecap.com.

Today's Fed rate decision will be announced at 11am PT / 2pm ET. The market is currently projecting a 93% probability that there's a 25-bp rate hike. One other place this probability shows up is with 1-Month Term SOFR. We simplify loan pricing by saying "SOFR + 2.50%", but the reality is almost every lender is using 1-Month Term SOFR which is based on futures contracts and reflects market expectations for SOFR over the coming month. For most of 2026, overnight SOFR and 1-Month Term SOFR tracked in the 3.60s. However, these rates started to diverge at the beginning of September when the market began repricing the probability of a Fed rate hike on September 16th (today). 1-Month Term SOFR has already increased 25 bps to 3.89% this morning, while overnight SOFR is still 3.64%. For those that have floating rate agency loans, it's worth noting that the agencies do not use 1-Month Term SOFR, but 30-day Average SOFR which is backwards looking. So the impact of today's hike will be reflected gradually in your interest expense over the following 30 days, rather than immediately.

I feel like a broken record writing about how closely the 5-year Treasury has been tracking oil prices lately, so I created a chart to highlight the relationship. This is happening because investors believe higher oil prices will lead to higher inflation, which makes the Fed more likely to respond by raising short-term rates. And vice versa.

The latest podcast episode is available for download. The guest is the CEO & Founder of PACE Loan Group - Rafi Golberstein. Our conversation answers many questions, including: - How did Rafi get started in CRE and what was his path to eventually starting PLG? - What is C-PACE and how has it evolved over the past 10 years? - What are the sizing constraints? - What are the typical terms today? (pricing, prepayment, etc.) - What are the most common deal/asset types they're financing? - Where is the C-PACE industry going over the next 12 months? - How does the decision-making process work at PLG? You can listen to the episode on Apple or Spotify - thank you!

I had a great conversation with the CEO of Genesis Capital. The company is one of the top construction lenders in the country and is on pace to close ~$6.5 billion in loan volume this year. You can check it out by searching for "Recap with Brandon Roth" on Apple or Spotify.

Over the past few days, lenders shared 72 quotes they issued in April and I aggregated the data into a filterable table. The example below shows the construction financing quotes that were received. I'll share a download link for the full Excel table in Monday's newsletter.

This week JV equity investors shared 29 deals they closed in Q1. I'll share an overview in Monday's capital markets newsletter. If you're interested in joining, you can subscribe using the link on my profile.

Don't shoot the messenger, but it's important to be aware that the forward SOFR curve has meaningfully shifted over the past week. The market is now projecting 1-month Term SOFR to end the year at 3.48%, which is 19 bps higher than last week. The likelihood the Fed holds rates unchanged through the end of July has increased from 18% a month ago to 62% today. This is largely being driven by rising oil prices and concerns about inflation. Just an anecdote, but gas is $6+ in my town.

Last week lenders shared 102 examples of quotes they issued in February. Here are the top 5: - $40M construction loan for a spec industrial development. 63% LTC priced at SOFR + 2.50%. (Insurance) - $90M bridge loan for a new industrial project in lease-up and 40% occupied. 65% LTV priced at SOFR + 2.60%. (Insurance) - $85M construction loan for multifamily development. 63% LTC priced at SOFR + 2.35% burning down to SOFR + 1.95% at stabilization. (Bank) - $100M construction loan for multifamily development. 74% LTC priced at SOFR + 3.50%. (Foreign pension fund) - $99M bridge loan for a near-stabilized MF property. Going-in at a 7% debt yield stabilizing to 8%. Priced at SOFR + 2.15%. (Debt fund) It's also worth noting that there were a few very cheap agency quotes with spreads ranging from 1.25% to 1.39% with no buydown.

When working on bridge or construction deals where you're projecting a future stabilized LTV, I recommend creating a matrix showing the range of potential outcomes based on various rents and cap rates. The reality is the future is uncertain, and it's far easier for lenders to get comfortable if they can see they're still protected in a downside scenario. If it'd be helpful to see a video showing how to create this in Excel, please let me know and I'll pull it together.

When a business owes you funds but they can't find you for a long time, they transfer those funds to the state, which holds them as a custodian until the rightful owner claims them. This can include: - Utility refunds or deposits - Uncashed checks - Old bank accounts - Overpayments I just checked the database and had 4 claims dating back 10-20 years that totaled to $400+. I checked for each of my family members and they all had $200+. My sister had $970. The database is managed by the National Association of State Treasurers and you can check it out at missingmoney.com. It's a bit of a hokey name that sounds like a scam, but it's legit. After you claim the various accounts that are yours, you receive an email from your state government with an official form to submit to get the cash. Good luck! P.S. Even if you don't care about this for yourself, check for your friends and family - especially the ones not quite as tech-savvy as you.

Every Monday I send out a capital markets update based on my firsthand experience and conversations with capital providers. I think it's a decent way to stay informed on new lenders and equity investors in the market, changes to loan programs, recent quotes, etc. If you're interested in checking it out, you can subscribe using the link on my profile. The next one will go out today around 11am PT. Thank you!

The 10-year Treasury yield just dipped below 4% for the first time this year. Investors are moving capital to Treasuries as a safe haven. Here are two major reasons: 1) Concerns about AI disrupting entire industries, job losses, etc. See Jack Dorsey's post from yesterday about laying off nearly half their workforce. 2) Concerns about a conflict between the US and Iran. On Polymarket, the odds of a US strike on Iran before March 31st has increased from 30% two weeks ago to 66% today.

I talk to developers frequently about construction financing, so I pulled together this graphic to highlight how I think about the market today. There are always exceptions to the rule, but this covers 90% of it. The pricing below would apply to multifamily and industrial. Riskier asset types like condos, hotels, etc. would have a pricing premium. FYI, you can go beyond 80% LTC for a higher cost. 85%-ish typically includes some upside profit participation.

Just got off a call with an insurance company that provides both debt and common equity (no pref or mezz). Here's what they shared: - For equity, they see more value in ground-up development than buying existing assets. They're primarily focused on MF, BTR, & industrial, and are looking to deploy $20M-50M checks with strong regional or national sponsors that have a pipeline where they can do repeat deals. - On the debt side, they're focused on $25M to $75M loans for industrial and MF, but open to grocery-anchored retail as well. Over 60% of their portfolio is industrial. - They can offer construction, bridge, and permanent financing. They closed ~$2.1B last year and will do more this year. - Construction is 60-65% LTC with pricing around S+3.0% on a non-recourse basis. They've done several spec industrial construction deals. - Bridge for them typically means light value-add or near-stabilization deals. As an example, they can price MF with a DY in the high 7s as low as SOFR+"high 100s". They can also offer a 3-year fixed rate product at 3-year UST + 1.60% to 1.80%, which would be 5.04% to 5.24% today. - Permanent financing is typically pricing as Treasuries + 1.40% to 1.60% with an average LTV around 55%.

There's a common error that I see in some Excel models today that results in a property being undervalued. Since property values have fallen in many markets over the last few years, a new buyer's NOI will likely be higher than the existing owner's NOI because the new buyer's property taxes will be lower. If you were to estimate the value of your property based on a cap rate and the in-place NOI without adjusting the property taxes for the new buyer, then you're likely going to undervalue the property. There's a simple shortcut to estimate the new buyer's NOI based on a reset tax basis without creating a circular reference. Step 1: Add the Property Tax Expense back to the NOI Step 2: Add the Tax Rate to the Cap Rate Step 3: Divide the higher NOI by the higher cap rate This will equal the same result as using your original cap rate with the buyer's NOI inclusive of the reset property taxes. Note: Property tax calculations based for a new purchase will vary state to state. In California, the property taxes will be based on the new purchase price.

It's easy to calculate your loan amount when it's based on a certain debt yield. However, it's less intuitive when the loan sizing is based on a specific rate, amortization, and DSCR. That's why I convert the traditional DSCR sizing to the "Debt Yield Equivalent". This video shows how to do it quickly. A few definitions: 1) Loan constant = annual debt service divided by loan amount. 2) Debt yield = NOI divided by the loan amount. 3) DSCR = Debt Service Coverage Ratio. This is your NOI divided by the annual debt service. --- Step 1: Calculate the Loan Constant by calculating your annual debt service using $1 as your loan amount. Here's the formula: =PMT(rate/12,amortization*12,-1)*12 Just link "rate" and "amortization" to the cells with this info. --- Step 2: Multiply the Loan Constant by the DSCR to get the Debt Yield Equivalent. --- Step 3: Calculate your loan amount by dividing the NOI by the Debt Yield. --- So if a lender tells you that they're sizing to a 1.25x DSCR using a 5.5% rate and 30-year amortization, then all you need to do is divide your NOI by 8.5% to get the same loan sizing. If mortgage rates fall to 5.00%, then the debt yield requirement improves to 8.0% and you'll qualify for higher proceeds.

Eric Smith is a CMBS loan originator at Deutsche Bank. Over the past 28 years, he has closed more than 1,300 CMBS loans.  We recorded a podcast on Friday that covered many topics, including: - What is CMBS financing and how does it work? - Why is there a higher concentration of multifamily in CMBS pools today? - What's the role and impact of CMBS rating agencies? - Why is Fitch the primary rating agency? - What is a B-piece? - History of CMBS (1.0 vs. today) - Is CMBS becoming more borrower-friendly post-closing? - What are the most common asset types for CMBS? - What are the typical loan sizes, leverage, and pricing? - What are the primary benefits for a borrower? - Takeaways from MBA CREF in San Diego If you're interested in checking it out, search "Recap with Brandon Roth" on Apple or Spotify. Thank you!

I'm at the MBA CREF conference right now in San Diego. After meeting with lenders all day yesterday, a couple of themes stood out: 1) Most lenders had a strong 2025 and plan to increase their volume 25-50% in 2026. 2) This increased liquidity in the market is leading to much more borrower-friendly terms as groups compete to win deals. This means: - Higher leverage - Lower pricing - More flexible prepayment terms - Less structure In addition, the groups that can't compete on the lowest pricing are expanding to new secondary/tertiary markets where they can still earn a little more yield. The table below shows 40 of the most attractive quotes that were received last week as part of the January debt quote survey.

Last week, I asked lenders about deals they quoted in January. They shared 159 examples, which I aggregated into a filterable table. The screenshot below shows a subset of 32 construction loan quotes. The full dataset includes 10+ asset types and a wide variety of deal profiles. I'll share access to the full Excel table in Monday's newsletter.

If you'd like to learn about: - 2025 Bay Area multifamily recap & what's driving more sale transactions - Buyer profiles and target returns - How NOAH deals work (Property Tax Welfare Exemption) - Submarkets in highest demand - Property performance trends - Demand drivers in the Bay Area - Undewriting (rent growth, exit caps, etc.) - Acquisition financing - NMHC recap - Rent-to-income ratios - 2026 forecast Check out the podcast I recorded yesterday with Alex Tartaglia. He's part of Institutional Property Advisors (IPA)'s multifamily investment sales team in Northern California. They've sold approximately 50% of all institutional multifamily sales in the Bay Area over the past 10 years, including $2B in 2025. You can listen on: Apple - podcasts.apple.com/us/podcas… Spotify - open.spotify.com/episode/3Di…