👋 Good morning,

Nine days ago the Fed raised rates for the first time since 2023. If you were waiting for things to settle down after that, this was not the week for it. The bond market kept moving — and for anyone holding or refinancing strip center debt, that matters more than the Fed decision itself did.

On September 16th, the Fed raised its benchmark rate a quarter point to 3.75–4.00%, and prime followed to 7.00% the next day (Wells Fargo). Normally that's the headline event of the month. But the bigger move happened after the decision, not before it: this week the 10-year Treasury spiked to roughly 5.20% — a 19-year high — before easing slightly to close Friday at 5.17% (CNBC; Advisor Perspectives). The 30-year hit levels not seen since 2004 (CNBC).

Two things are driving it. First, hawkish Fed commentary since the hike has markets pricing in real odds of another quarter-point move at the October 27–28 meeting — the Fed's own dot plot points to a 4.1% year-end median, one more hike above where we sit today (FedRateCalc). Second, oil market volatility tied to the Strait of Hormuz situation has kept a risk premium in long-term rates. We'll stay in markets-and-economy language on that one — it's a supply-and-pricing story, not a policy debate.

Two weeks ago, before the hike, an illustrative 10-year-plus-spread loan range sat around 6.54–7.04%. Today, running the same math off this week's 5.17% base and a 175–225 bps lender spread, that range is 6.92–7.42% (PrimeRates). That's not the Fed's quarter point — that's the bond market adding its own on top. This is illustrative only, not a rate quote; actual pricing depends on your lender, asset, and structure.

For floating-rate borrowers, prime at 7.00% is unchanged since the hike, but if you're on SBA 7(a) paper, the bid pool for owner-user buyers just got a little more expensive too — worth a conversation with your lender before you assume last month's terms still hold. Larger bank paper on SOFR should get the same recheck.

CRE Takeaway: If you have debt maturing in 2027 or 2028, run the refinance math against 5.17%, not August's number. A rate-lock inquiry costs you nothing and tells you exactly where you stand this week — and this is now the second consecutive Wrap-Up where that's the actionable answer.

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The University of Michigan's final September sentiment read came in at 48.1 — the lowest in four months, down from August's 51.7. Year-ahead inflation expectations jumped to 4.6%, up from 4.0% and the highest since June (Advisor Perspectives; Quartz). We treat Michigan's survey as directional at best, not a lead indicator on its own — but the swing itself is notable.

And yet Costco's fiscal fourth quarter, reported this week, showed comparable sales up 9.4% (6.7% on an adjusted basis), with digitally-enabled sales up 19.5% (Yahoo Finance; SEC EDGAR). That's not a consumer pulling back — that's a consumer who says they're anxious and keeps shopping anyway.

This is the gap that matters for strip center owners: survey sentiment and actual necessity-tenant traffic have been telling two different stories for a while now. Costco is a warehouse club, not a direct comp for your grocery-anchored or QSR-anchored center — but it's another data point that real spending is holding up better than the mood.

CRE Takeaway: If a buyer or lender brings up "consumer pullback" as a reason to discount your center, ask which number they're pointing to — survey sentiment, or actual sales. All year, actual necessity- and value-tenant sales have been the more reliable signal.

The national gas average hit $4.48–4.49 a gallon this week — an all-time high for this point in the calendar year, with September on track to average $4.30, breaking the prior September record of $3.83 set in 2023 (AAA; Energy Factbook). Texas stayed the cheapest state in the country at roughly $3.95–3.96, a structural gap of about 53 cents a gallon (Finder).

We treat this purely as a retail-sales price mechanic — it's discretionary income your tenants' customers keep in their pocket, not a talking point about the underlying supply situation (The National). For your tenant mix — QSR drive-thrus, value retail, inline service — that fuel gap is real, ongoing insulation against the kind of pump-price shock that's showing up in the national inflation-expectations numbers right now.

Rates moved more after the hike than during it. Price your rollover risk off this week's 5.17%, not last month's number.