Credit Tenant Lease Loan Rates Down in Correlation with US Treasury Bonds – Rates in the 4%s or Lower for Best Tenants

US Treasury Bond rates have been trending down lately (See chart below).

As many of you know, credit tenant lease loans are priced based on an interpolated Treasury Bond yield plus a small margin spread. When T Bond rates go down CTL rates go down with them.

T Note Yield

10 Year US Treasury Note 6/13/11

Mortgage rates on buildings with the best tenants with long-term, NNN, NN or bondable leases are being priced in the mid 4% range (+/-) or even lower.

With the fed contemplating the end of QE2 and the credit worthiness of the USA continuing to deteriorate, rates are sure to start to rise sometime. Investors with single tenant, NNN assets leased to credit worthy tenants would do well to refinance (or buy more) now while rates are very reasonable. They won’t be forever.

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