Date of Award

Spring 5-9-2026

Document Type

Thesis

Degree Name

Bachelor of Science (BS)

Department

Finance and Economics

College

College of Business

First Advisor

Marvin Keene

Abstract/Description

This study analyzes the relationship between U.S. interest rates and capitalization rates within commercial real estate under different monetary policy regimes. Specifically, the research examines whether the relationship between interest rates and cap rates changed structurally between the post-Global Financial Crisis (GFC) period and the post-COVID tightening cycle. Using quarterly data from 2000–2025 obtained from Federal Reserve Economic Data (FRED), the study compares movements in the 10-Year U.S. Treasury yield and a constructed cap rate proxy derived from rental income and property price index data. Linear regression analysis was conducted across three monetary policy periods: the post-GFC expansionary environment (2010– 2019), the COVID shock period (2020–2021), and the post-COVID tightening cycle (2022– 2025). Results indicate that the relationship between interest rates and cap rates shifted significantly over time. Earlier periods displayed a negative relationship, while the post-COVID period demonstrated a strong positive relationship between rates and cap rates. Findings suggest that monetary policy transmission into commercial real estate valuation has evolved due to changing inflation expectations, financing conditions, and investor risk perceptions.

Additional Files
Matney Honors Thesis Presentation Board 2026.pdf (297 kB)
Honors Thesis Posterboard
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