Although there continues to be a lot of concern around commercial real estate, our work suggests that this stress is relatively contained. The chart on the left shows U.S. real estate cap rate spreads, essentially the rate of return on a real estate investment property over the U.S. 10-year Treasury, on average over four quarters. While spreads climbed at the onset of the pandemic, they have since come down below their long-run average, due to higher rates. However, the chart on the right shows a mild uptick thus far in office vacancy rates. Retail, industrial and apartment, on the other hand, are trending lower.