It is Thursday, July 2nd, and this is Debt Desk.

Let’s start with the national morning brief, because the macro backdrop for real estate debt feels a little sharper today. The economy is still expanding, but the fresh headlines are telling you that growth, policy, and operating risk are all moving at the same time.

The first story is the labor market, and the new data landed in time to shape the rates conversation. The Labor Department reported on Thursday that U.S. employers added only 57,000 jobs in June, while the unemployment rate edged down to 4.2 percent from 4.3 percent. On the surface that lower unemployment rate looks reassuring, but the more important point is that hiring cooled materially and labor-force participation fell. In other words, the headline unemployment rate improved for a less comfortable reason. That is the sort of report that can keep recession talk alive without fully breaking the soft-landing story.

That softer payroll report sits next to another labor signal that is steadier, not weaker. The Labor Department’s weekly claims report also released Thursday showed initial jobless claims fell by 1,000 to 215,000 for the week ending June 27. So layoffs still are not blowing out. The broad picture is a job market that is not collapsing, but also is not generating the kind of hiring momentum that would make markets comfortable with higher-for-longer financing costs. For commercial real estate, that matters because labor softness usually shows up first as slower tenant expansion, more cautious consumer spending, and longer lease-up timelines before it shows up as outright stress.

The second story is still Washington. The Senate passage of President Trump’s tax and spending bill on Wednesday remains one of the biggest drivers of market tone heading into the long weekend. The closer this debate gets to actual implementation, the harder it becomes for the bond market to ignore the deficit and supply backdrop. Borrowers do not finance off the policy headline. They finance off the Treasury screen that reacts to it.

The third national story is the continuing aftershock from the Supreme Court’s birthright citizenship ruling earlier this week. The court rejected the administration’s attempt to narrow birthright citizenship through executive action, and the broader takeaway for markets is that major policy shifts still have to survive institutional checks. That does not move apartment cap rates by itself, but it does affect the larger question investors keep asking in 2026, which is how durable any major policy move really is. When law, executive action, and Congress are all moving at once, policy durability becomes part of risk pricing.

The fourth story is weather, and this one has a direct operating-cost angle for property owners. The National Weather Service said on Thursday that dangerous, record-breaking heat will continue across most of the central and eastern U.S. through Friday and then remain focused on the eastern U.S. through the Independence Day weekend, with heat indices up to 115 degrees possible. At the same time, the National Interagency Fire Center said Thursday that 75 new fires were reported nationwide yesterday, 49 large fires remain uncontained, and the national preparedness level is still at 4. That is not just background noise. Heat drives power demand and building stress, while wildfire risk keeps feeding insurance, resilience, and underwriting discussions. In real estate credit, climate risk is now a current-income issue as much as a long-duration one.

So the national setup this morning is straightforward. Hiring is softer, layoffs are still contained, Washington is still injecting fiscal uncertainty into rates, and weather risk remains a real operating variable. That is the frame we carry into the debt markets today.

Now let’s turn to Debt Desk.

The first anchor is rates, and today we can move off verified official prints. For Wednesday, July 1, the Treasury curve closed at 4.17 percent on the 2-year, 4.24 percent on the 5-year, 4.48 percent on the 10-year, and 4.97 percent on the 30-year. The latest official SOFR print available at run time is 3.66 percent for July 1.

That curve tells a pretty clear story. The front end is still elevated enough that bridge carry has real bite, while the long end is heavy enough that permanent financing does not feel especially cheap either. The 2-year at 4.17 and the 5-year at 4.24 say the market is not pricing an easy glide path lower. Then the move out to 4.48 on the 10-year and 4.97 on the 30-year says term certainty still comes with a meaningful premium. If you are a borrower today, there is no effortless answer. Floating debt is still expensive enough to punish a slow business plan, and fixed-rate debt still forces you to decide whether to lock against a long end that has not fully settled down.

That is why execution tone matters as much as benchmark rates, and the freshest broad read on that tone still comes from CRE Finance Council research director Raj Aidasani, who said capital is back, but it is selective. Sponsorship, asset quality, lease visibility, and exit clarity still decide who gets real competition and who gets a polite pass.

You can see that selective capital in the latest office debt headline. Commercial Observer reported on July 1 that Silver Creek Development secured a $31.4 million bridge loan from Obra Real Estate to refinance a single-tenant office complex in Gilbert, Arizona that is fully leased to Northrop Grumman. That is a very specific risk profile: strong tenant credit, clear sponsorship, and an execution window where a nonbank lender can win by moving quickly. Obra itself emphasized certainty of close and flexible capital. That is textbook 2026 debt-fund behavior. Debt funds are not just filling gaps anymore; they are winning deals where speed and structure matter more than the last few basis points of coupon.

Banks, meanwhile, still appear most competitive where the collateral story is simple and cash flow is durable. Over the last two days, multifamily and construction headlines have carried more of that flow, while the office lane remains open mostly for very clean stories. For life-company or insurance-style capital, the tone still looks quality-first rather than volume-first.

CMBS remains open enough to matter, but the latest data say you cannot confuse access with ease. CRE Finance Council’s May loan performance report, released June 29, showed overall CMBS delinquency at 7.55 percent, with the effective rate at 9.17 percent once performing matured balloons are included. Office delinquency was 11.53 percent, while overall special servicing stood at 10.86 percent. That is a good reminder that the primary market may be functioning, but refinancing friction is still very real in the legacy book.

And the newest property-level example of that friction came from Commercial Observer on June 30, which reported that a $131.5 million CMBS loan backed by 2 Washington Street in Lower Manhattan transferred to special servicing because of cash-flow issues after Sonder’s collapse cut off most of the property’s income. So on the same day that healthy borrowers are finding money, troubled stories are still moving into workout channels fast. That split market remains one of the defining features of 2026.

For borrowers, then, the lane map still looks familiar. Banks are active for relationship-friendly and stabilized executions. Insurance and other long-term balance-sheet capital want quality and lower drama. CMBS can work on strong collateral and still offers real scale, but it is demanding. Debt funds are useful where bridge needs, timing pressure, lease-up, or complexity push a deal outside the most conservative boxes. The market is available, but it still charges a premium for uncertainty.

Now let’s move into multifamily, where the financing menu remains broader than anywhere else in commercial real estate, even if every source of capital is underwriting harder.

The biggest fresh multifamily headline this afternoon is out of Miami. Commercial Observer reported on July 2 that LCOR landed a $192.5 million construction loan from Natixis for a 544-unit tower at 1775 Biscayne Boulevard near Edgewater. That is an important signal because it shows large-bank construction money is still available for sizable apartment development in high-conviction growth markets. Miami is not getting financed because capital is easy. It is getting financed because lenders still believe in occupancy, rent resilience, and long-run demand in select Sun Belt urban nodes.

The second fresh apartment story came from Yonkers. Commercial Observer also reported on July 2 that Azorim secured a $68.75 million fixed-rate, interest-only construction loan from Western Alliance Bank for the 174-unit Miroza Tower 4, the final phase of its Ridge Hill project. That is another useful read-through. Regional and commercial banks will still do construction when the sponsor is proven, the market is known, and the deal is the next phase of something already demonstrated rather than a speculative leap.

Then there is the refinance side, where private credit is still deeply relevant. Commercial Observer reported today that Prime Finance provided a $46.25 million floating-rate loan to refinance the 388-unit Aspen Park multifamily asset in Northglenn, Colorado. That one matters because it highlights a reality borrowers know well right now: even in multifamily, not every takeout goes straight to agencies or banks. Floating-rate private credit still has a role when sponsors want flexibility, when timing matters, or when the asset is not yet in the cleanest permanent-loan box.

CMBS also remains part of the multifamily conversation. Commercial Observe...