The sharp decline in the 10-year Treasury yield in Q3 meant marked improvement in our property valuation scores. That left all-property looking “fairly valued” for the first time since the end of 2021.
But the expected economic impact of a second Trump presidency has pushed bond yields higher and we expect the 10-year Treasury yield to end the year at around 4.5%. That would therefore mean real estate valuations still look stretched, suggesting a further rise in appraisal-based cap rates to come.
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