In its recent look at U.S. capital trends, using the most recent data through 2023, MSCI look at what it called debt snapshots — a handful of considerations that help explain how troublesome CRE debt markets are at the moment.
The first was the spread between corporate debt and CRE debt and how it has risen to a high at least when looking at figures from the last 24 years. It was more relatively costly to finance a commercial property through a direct mortgage.
"The spread between commercial mortgage rates and corporate bonds widened to an average of 121 basis points over the last six months of 2023," MSCI wrote. "Looking back to 2000, mortgage rates were at a comparable high relative to the cost of corporate debt only in the worst parts of the GFC. And even then, the spread was only at high levels for three months."
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