1st Quarter Newsletter
Greetings from Charlotte, where Spring is in the air, and the flowers are in full bloom, but there's a rain shortage that will hopefully correct itself soon. Medalist Capital carried over a strong pipeline from the 4th quarter of 2025, contributing to record results in the first quarter of 2026. During the quarter, we closed 32 transactions totaling $541 million in deal volume. It was spread across all product categories, but Multifamily led the way with 42.4% of the production, followed by Industrial at 20.6%, Student Housing at 9.5%, and Office at 7.3%, with the balance in Mixed Use, Hospitality, and Self-Storage. Our production was achieved through a variety of lending sources, with life companies and banks leading the way. We saw spreads from our life companies as low as 115 bp over the corresponding treasuries for properties with strong credit profiles and great sponsorship. Life companies were also seeking higher spreads for more complex deals, including office properties and pre-stabilized loans. During the quarter, we also saw the banks actively re-enter the market.
The 10-year Treasury was at 4.22% at the beginning of the quarter and seemed to be headed in the right direction, reaching a low of 3.96% on Feb 27th. The following day, the Iran conflict was announced, which resulted in the 10-year rising to a peak of 4.44% in late March before ending the quarter at 4.31%. Regarding short-term rates, it is impossible to predict whether the Fed will reduce rates for the remainder of the year, as the Fed’s next move is the industry’s biggest unknown. Still, economists say it is becoming increasingly doubtful over the next six months, as the war in Iran is driving elevated inflation. Geopolitical risk remains the biggest unknown factor in the industry.
We are fortunate to be in the Southeast, where there continues to be population growth, corporate migration, job creation, and relative affordability. Our capital sources have ample capacity and remain very bullish in these markets, which is an encouraging sign for borrowers. Our pipeline remains robust, and we anticipate strong results in the 2nd quarter. Please reach out to your Medalist Capital contact for your borrowing needs or to get a current read on the market, as we speak with multiple lenders every day. We’re here to help you navigate the volatility.