Good morning. It is Wednesday, June 24th, and this is Debt Desk.

Before we get into commercial real estate and multifamily debt, here is the broader morning brief. Markets are coming in with a slightly calmer tone, but not a clean one. The rates backdrop is still doing real work in every financing conversation. The latest official Treasury curve at run time is June 23rd, with the 2-year at 4.16 percent, the 5-year at 4.27 percent, the 10-year at 4.50 percent, and the 30-year at 4.94 percent. The latest official SOFR print is June 22nd at 3.61 percent. That leaves a curve that is still high enough to pressure refinance math, but not so disorderly that deals have stopped. It is a market that will fund, but it wants a reason.

In the national picture this morning, one of the cleanest developments is another court setback for the administration’s immigration strategy. AP reports that a federal judge barred immigration arrests at immigration courthouses nationwide, saying the government did not provide a lawful or reasoned basis for changing long-standing protections. The practical market read is not about the courthouse itself. It is that major policy fights are still being redirected through the courts, which keeps legal uncertainty elevated for employers, local governments, and any sector tied to labor mobility.

That was followed by another fresh immigration ruling, this one from the D.C. Circuit. AP reports a federal appeals court allowed the administration to resume an expanded use of expedited deportations beyond the border region. So within the same news cycle, one court narrows an enforcement tool and another reopens a different one. The macro takeaway is continued policy volatility rather than a settled direction, and that matters because volatility tends to keep business decision-makers cautious even when there is no immediate economic shock.

Election administration is also back in focus. AP reports a federal judge dismissed the Justice Department’s lawsuit seeking detailed voter data from Maryland, including sensitive personal information that the administration said it needed for list maintenance and citizenship checks. That decision lands just after the separate ruling blocking use of the revamped SAVE database for voter citizenship screening. Put together, it suggests the administration’s election-related data strategy is running into increasing resistance in court, and that is likely to remain a live political and legal story through the rest of the week.

Another headline worth watching sits at the intersection of AI, national security, and procurement. Reuters, citing the Associated Press, reports that Anthropic’s Mythos model identified vulnerabilities in classified U.S. government systems during a testing exercise. The immediate significance is not that one model found flaws. It is that AI red-teaming against sensitive federal systems is moving from theory into disclosed real-world testing. That is likely to drive more scrutiny of federal cyber spending, vendor selection, and the speed at which agencies adopt commercial AI tools.

So the national backdrop this morning is a familiar 2026 mix: courts are shaping policy in real time, election administration remains contested, and technology risk is moving closer to the center of Washington decision-making. None of that is directly a property story, but all of it feeds the financing environment by influencing business confidence, labor assumptions, and risk pricing.

Now let’s shift into Debt Desk.

The first thing to understand this morning is that the rate picture is still restrictive, but it has become manageable enough for credible borrowers to transact. With the 2-year at 4.16 and the 10-year at 4.50, front-end funding costs are no longer the only issue. The long end matters again because permanent debt buyers are looking beyond the 10-year and pricing in a 30-year Treasury that is still sitting just under 5 percent. For borrowers, that means the hurdle is not simply whether rates are high. It is whether the whole term structure lets a deal clear with acceptable leverage and debt service coverage.

SOFR at 3.61 percent keeps floating-rate execution workable for short-duration business, but not cheap. That still favors borrowers who can point to a quick lease-up, a near-term conversion event, or an obvious bridge-to-agency or bridge-to-sale path. It is much less forgiving for assets that need time and capital at the same moment.

You can see that in the deal mix. Commercial Observer reports today that S3 Capital provided $102 million of construction financing for Hershy Silberstein’s office-to-residential conversion of the Press Building in Hell’s Kitchen. That is exactly the kind of transaction that tells you where debt funds still have an edge. It is transitional, it is execution-heavy, and it requires comfort with a business plan that many traditional lenders would rather not underwrite from scratch. When a debt fund is showing up there, it is not just because the project exists. It is because the market still rewards lenders willing to finance complexity.

The same pattern showed up earlier this week in Hawaii, where Commercial Observer reported that X-Caliber Rural Capital and CastleGreen Finance closed a combined $431 million senior loan and C-PACE package for the Coco Palms Resort redevelopment in Kauai. That is another reminder that structured capital remains available for large, messy redevelopments, but usually through specialized channels rather than plain-vanilla bank balance sheet lending.

The bank read, by contrast, is selective but not absent. Commercial Observer reported that Helaba supplied a $111.5 million construction loan to StreetLights Residential and Pritzker Realty Group for the apartment redevelopment of the former JCPenney headquarters campus in Plano. That tells you banks will still fund multifamily construction when the sponsor is proven, the market is legible, and the story is strong enough to survive today’s carry. It does not mean broad bank risk appetite is back. It means relationship-driven, high-conviction construction lending is still getting over the line.

On the CMBS side, the market is open, but the legacy book keeps flashing warning lights. Commercial Observer, citing CRED iQ, reported that the overall CMBS distress rate rose to 11.86 percent in May, with special servicing at 11.25 percent and delinquency at 9.53 percent. That is not a new-issue shutdown story, but it is a clear signal that old problems are still accumulating even while new executions are happening. The practical implication is that conduit lenders can compete on the right asset, yet they are doing it with conservative assumptions because the workout pipeline remains full.

That same CRED iQ coverage from earlier this quarter showed 10-year CRE loan spreads tightening over the past year, with multifamily leading the move. And Commercial Observer’s June cap-rate analysis put average Freddie Mac multifamily coupons around 4.98 percent versus roughly 6.44 percent for conduit multifamily, a gap of about 145 basis points. Put those pieces together and the tone is fairly clear. Agencies still own best execution on stabilized apartment collateral. CMBS can work, especially for scale and standardization, but it usually is not winning a straight beauty contest against agency paper. Debt funds are strongest where the asset needs transformation. Banks will pick their spots. Life companies, by inference, remain most competitive on lower-leverage, stabilized product where duration and sponsorship line up cleanly.

That inference matters because borrowers keep asking the same question: who is really lending? The answer this morning is that everyone is lending a little, but almost nobody is lending indiscriminately.

In multifamily specifically, the transaction tape is still healthier than the broader CRE conversation might suggest. Commercial Observer reports today that Peachtree Group originated a $43.5 million bridge loan for the final phase and lease-up of Seahaven Apartments in Panama City Beach. Again, that is bridge capital doing exactly what bridge capital is supposed to do: finishing a nearly complete project and carrying it toward stabilization rather than forcing a premature permanent execution.

That fits with the Plano construction loan from Helaba, and together those two deals tell you the multifamily market still has a live funding lane for both construction and late-stage lease-up, provided the borrower can show clear absorption and an achievable exit.

Agency capital remains the most important stabilizer. Freddie Mac’s latest issuance calendar, dated June 18th, shows K-7671 on the week of June 22nd with a projected issuance size of roughly $965 million for a seven-year conventional fixed-rate deal. That is not just a calendar item. It is evidence that agency securitization liquidity is still showing up on schedule at meaningful size. When that machine keeps running, it sets the benchmark for the rest of the apartment debt market.

On the Fannie Mae side, the most relevant fresh update is not a splashy loan closing but a capital-markets rule change. Fannie Mae announced on June 17th that bulk-delivery multifamily MBS are now eligible for resecuritization, adding another liquidity tool inside the agency ecosystem. Earlier in the month, Fannie also issued Lender Letter 26-03 with updated multifamily loan documents that become mandatory for confirmed commitment dates on or after June 30th. Neither item is a headline-grabbing rate move, but both matter because they show the agency channel still refining process and liquidity rather than pulling back.

There is also a useful competitive signal from market share. Commercial Observer reported on ...