Capital Returns Selectively

The Federal Reserve raised its target range by 25 basis points to 3.75%–4.00% on September 16. The July lending survey, largely describing Q2, reported easing in selected income-producing CRE categories. MBA's national Q2 borrowing headline showed 16% year-over-year growth. These different periods support selective liquidity, not a claim that all-in financing costs are falling.

Track Treasury yields separately from lender spreads. Fees, rate protection, reserves, amortization and recourse also change economics. Banks, agency lenders, CMBS and private credit serve different collateral and business plans; this edition does not assign unsupported Q3 growth rates to those channels.

Debt-service coverage ratio (DSCR) compares recognized income with annual debt service. Debt Yield compares income with loan principal. Loan-to-value (LTV) and loan-to-cost (LTC) use different denominators. State the lender's definitions and test every applicable constraint.

Reconcile the rent roll, trailing twelve months of operations and capital budget before relying on a term sheet. Verify collectible rents and lease obligations. Model maturity repayment using supportable future income and a possible equity shortfall; an extension or cheaper refinance should not be the only repayment plan.

Monitor yields, lending standards, executable spreads, maturity extensions and refinancing gaps.