Bisnow Reports First Draft Live Ep 12: The Bond Market’s Warning To Real Estate (with Chris Stanley)
Sep 5, 2025
In this discussion, Chris Stanley, the banking industry practice lead at Moody’s Analytics, breaks down the turbulent bond markets affecting commercial real estate. He explains how rising UK gilt yields and U.S. Treasury volatility are complicating refinancing and valuations. Stanley emphasizes the necessity of managing liquidity and understanding the yield curve. He also touches on balance sheet management in a nervous economy and how the dynamics of credit are shifting amidst increasing delinquencies in office and multifamily properties.
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Yield Curve Reveals Forward Truths
- The yield curve encodes a complex forward picture that market participants must reconcile with local realities.
- Bond markets often reveal truths about future financing costs and economic expectations.
Play Balance Sheet Management First
- Focus on balance sheet management: map liquidity timing, leverage, and interest rate exposure across your assets.
- Stress test cash flows to see how interest rate moves could convert interest risk into credit risk.
Tight Spreads Hide A Higher Baseline
- Tight credit spreads mask a higher baseline of borrowing costs because the entire yield curve has shifted up.
- That higher baseline will pressure NOI and push cap rates higher with some lag.