The Commercial Real Estate Deep Dive Podcast
Oct 9, 2026 · 10 min · 8 segments
Welcome to *The Deep Dive*, your go-to for the latest in commercial real estate. From market trends and interest rates to booming industrial hubs like DFW, we’re unpacking the data and stories shaping…
Well, looking at the data, today's deep dive is fundamentally about a market in transition.
We are seeing high capital costs completely reshaping who holds the power right now.
Which is wild to see unfold in real time.
It really is.
And at the same time, local Texas demographics are just totally rewriting the rules of retail tenant demand.
They really are.
But before we look at specific properties, we have to explain the overarching financial weather system governing every single deal right now.
Right.
The cost of capital.
Yes, the cost of capital.
So looking at the Boulder Group's Q.3 twenty twenty-six report, um, single-tenant net lease retail cap rates have risen nine basis points to six point six nine percent.
Which is a very significant jump.
It is.
It's actually the largest quarterly increase since twenty twenty-three.
And meanwhile, the ten-year treasury is just sitting above five percent.
Yeah, and that brings us to the concept of negative leverage, which we are seeing everywhere.
Oh, absolutely.
Break that down for us.
Sure.
So negative leverage happens when your permanent financing is generally priced higher than the yield the property actually generates.
Right.
So the bid-ask spread between buyers and sellers is just widening significantly because the math simply doesn't work for leveraged buyers anymore.
I mean, it's like trying to buy a rental house where the mortgage payment is mathematically guaranteed to be higher than the rent you collect.
That is exactly what it is.
It makes no sense.
Well, looking at the data, today's deep dive is fundamentally about a market in transition.
We are seeing high capital costs completely reshaping who holds the power right now.
Which is wild to see unfold in real time.
It really is.
And at the same time, local Texas demographics are just totally rewriting the rules of retail tenant demand.
They really are.
But before we look at specific properties, we have to explain the overarching financial weather system governing every single deal right now.
Right.
The cost of capital.
Yes, the cost of capital.
So looking at the Boulder Group's Q.3 twenty twenty-six report, um, single-tenant net lease retail cap rates have risen nine basis points to six point six nine percent.
Which is a very significant jump.
It is.
It's actually the largest quarterly increase since twenty twenty-three.
And meanwhile, the ten-year treasury is just sitting above five percent.
Yeah, and that brings us to the concept of negative leverage, which we are seeing everywhere.
Oh, absolutely.
Break that down for us.
Sure.
So negative leverage happens when your permanent financing is generally priced higher than the yield the property actually generates.
Right.
So the bid-ask spread between buyers and sellers is just widening significantly because the math simply doesn't work for leveraged buyers anymore.
I mean, it's like trying to buy a rental house where the mortgage payment is mathematically guaranteed to be higher than the rent you collect.
That is exactly what it is.
It makes no sense.
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