Three Meetings, No Movement
On June 17, 2026, the Federal Reserve held the federal funds rate at 3.50% to 3.75% on a unanimous 12-0 vote, its third consecutive meeting without a change. It was Kevin Warsh's first meeting as Fed Chair. The committee's updated projections signaled at least one rate hike may be needed this year, a hawkish shift from the cuts markets had expected earlier.
Markets have taken notice. Rate futures now price in no cuts through the rest of 2026, with some traders betting on a hike as early as October. For commercial real estate borrowers and investors, the message is clear: the rate environment you see today is the rate environment you should plan around.
What Current Rates Look Like for CRE
As of mid-June 2026, commercial mortgage rates start at 5.52% for well-qualified multifamily borrowers and 6.32% for CMBS loans. Bridge loan rates from private lenders range from 8.5% to 13% depending on leverage, asset type, and borrower experience.
The 10-year Treasury yield sits near 4.60%, the highest level in roughly 15 months. Since most permanent commercial loans are priced off the 10-year, this puts a floor under long-term borrowing costs even if the Fed eventually cuts short-term rates.
For context, the same multifamily loan that priced at 4.8% in early 2025 now costs 5.5% or more. On a $3 million loan, that is an additional $21,000 per year in debt service.
Impact on Deal Economics
Higher rates compress returns in two ways. First, they increase the cost of debt directly. Second, they put downward pressure on property values because buyers underwrite to higher cap rates when financing costs rise.
The practical effect: deals that worked at a 5.5% cap rate in 2024 now need to pencil at 6.0% to 6.5% for buyers using leverage. Sellers who have not adjusted expectations are sitting on stale listings.
Where opportunities exist
The silver lining is that motivated sellers create buying opportunities. Properties with deferred maintenance, below-market rents, or operational inefficiencies can still generate strong returns for investors willing to execute a value-add business plan. Requity Investments targets exactly these assets in the manufactured housing and small multifamily space.
What This Means for Bridge Borrowers
Bridge borrowers should plan for their exit refinance to land at current rate levels, not at some hoped-for lower rate 12 months from now. That means underwriting your deal to work at a 5.5% to 6.5% permanent loan rate.
If your deal only works with a sub-5% exit rate, it does not work. Lenders see through optimistic rate assumptions, and so should you.
The good news: bridge lenders like Requity are still actively lending. Private credit has stepped in aggressively as banks pull back, and borrowers with solid business plans and realistic exits are getting funded in 5 to 10 business days.
Investor Positioning
For passive investors in real estate funds, the higher-rate environment actually benefits private credit strategies. When base rates are elevated, debt funds generate stronger current yields. Industry benchmarks for private real estate credit have run in the high single digits with relatively low volatility.
The Requity Income Fund targets a 10% annual return to investors and benefits directly from this dynamic: higher base rates mean higher coupon income on the bridge loans in the portfolio, which flows through to investor distributions. Target returns are an objective, not a guarantee, and all private investments carry risk, including possible loss of principal.
Planning for the Rest of 2026
The prudent approach is to assume rates stay where they are through year end. Build your pro formas around current market rates, not forecasts. Stress-test your deals at 50 basis points above current levels. And if rates do come down, treat it as upside rather than a baseline assumption.
This is not a doom scenario. It is a market that rewards discipline, realistic underwriting, and operators who can genuinely add value to the assets they acquire.