Capital Markets Update – January 2014

  • Treasury 10-year yields recently reached the highest level in more than two years, 3.05%, after the Fed tapered QE to $75 billion per month and on speculation the U.S. economy will improve enough for the Fed to end bond purchases in 2014. Ten-year yields jumped more than 125 bps in 2013. They have averaged 3.50% in the past decade.
  • Cap rates are expected to remain relatively stable in 2014 as a result of a combination of factors including improving fundamentals, availability of debt, and demand for commercial real estate. Additionally, the cap rate spread to Treasury rates remains wide of historic averages for office, retail, and industrial.
  • Commercial Real Estate Direct reported that CMBS issuance for 2013 was $80.3 billion, up 82% from 2012. CMBS lenders are optimistic for a strong 2014 with volumes anticipated to reach $100-120 billion as lending standards loosen moderately and lending to secondary/tertiary properties increases.
  • C&W Research expects businesses to make a shift to being more concerned about sales growth and less worried about costs early in 2014. When this shift happens they will begin to hire more aggressively and employment growth will move higher. 2014 and 2015 are expected to be the strongest growth years for the US economy in at least a decade.

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About Cushman & Wakefield/NorthMarq

​Cushman & Wakefield/NorthMarq is a joint venture formed in September 2011 by NorthMarq Real Estate Services and the Minnesota operations of global real estate services firm Cushman & Wakefield. By combining the talent of both organizations at the regional level with the global platform of Cushman & Wakefield, we offer clients the best combination of regional strength and global capabilities. The result: the leading commercial real estate firm by all measures in the Upper Midwest.
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