What a Conflict in Iran Has to Do With Your Next Deal

By Garrett Williams, MSF · Founder & Managing Partner, PTP Partners — June 10, 2026

The 10-year Treasury climbed nearly 37 basis points in a single month.

That’s not noise. That’s repricing.

When Iran closed the Strait of Hormuz, a chokepoint for 27% of the world’s maritime crude, the bond market didn’t flee to safety. It priced in inflation. As of early June, the 10-year is sitting near 4.46-4.52% with no clean resolution in sight. The 5-year is at 4.29% and the 7-year at 4.42%. The entire curve is elevated, and those are the benchmarks that actually price most commercial real estate debt.

That’s the rate environment you’re underwriting into right now. Here’s what it looks like on the ground.

The Market Is Stabilizing. Sort Of.

The supply wave that reshaped multifamily fundamentals over the last several years is finally beginning to slow. But stabilizing doesn’t mean recovered.

Stabilized occupancy reached 95.2% in April, down roughly half a point year over year, but still within a range that supports operational stability, according to RealPage. The broader picture is more complicated. The national occupancy rate fell in April to 94.1%, its lowest level since 2013, down 60 basis points year over year, per Yardi Matrix.

The divergence is geographic. Sun Belt markets are still working through elevated deliveries. Constrained-supply markets like Chicago are pushing rents and holding occupancy above target. As one operator put it: “Stabilized doesn’t mean recovered. It just means the bleed has slowed.”

Renters Are Still There. They’re Just Taking Longer.

Demand hasn’t disappeared, but it has changed shape.

Prospective renters are taking longer to tour, comparing more options, and being more deliberate before signing. Leasing times are up. Tours per lease are up. Affordability concerns are playing a major role. Inflation is making renters more reluctant to stretch for an extra $200 a month when uncertainty is this high. (Multifamily Dive, June 2026)

That uncertainty has a number on it. Inflation accelerated to 3.8% in April, the highest reading in three years as rising energy prices pushed gasoline costs higher and eroded consumer purchasing power. (Yardi Matrix, May 2026)

The Iran conflict isn’t just a Treasury story. It’s an affordability story. Higher energy costs feed directly into the inflation renters are already feeling, and cautious renters are harder to close.

Concessions: The Real Story Is in the Details.

The headline numbers on concessions depend entirely on who you ask and what they own.

Multifamily REITs reported declining concessions in Q1 earnings. At the same time, CoStar, RealPage, and Yardi all show concession usage broadening in 2026, with discounts still substantial. Both can be true, and are, when you dig into the data. (Multifamily Dive, June 2026)

Concession dollars hit a record high in Q1, averaging $129 per unit. But only about 25% of units were offering incentives, concentrated in supply-pressured geographies and older products. By May, 17% of vacant units nationally were offering concessions, the highest rate for that month since 2013. The average discount works out to roughly 40 days rent-free. (Yardi Matrix / RealPage, May 2026)

Class matters here. Class C units are seeing average discounts of 23.4%, nearly double the Class A rate of 13.2%. The driver in many markets: immigration enforcement has reduced the renter pool for lower-priced product, particularly in Florida and Texas. (Multifamily Dive, June 2026)

The markets with the highest concession rates, Denver at 68%, Charlotte at 67%, Dallas at 64%, Austin at 64%, are exactly the Sun Belt markets that got overbuilt. The markets with the lowest, Buffalo, Providence, New York, Chicago, are the ones that didn’t. (Zillow, May 2026)

What This Means for Operators

The playbook right now is retention over acquisition. Firms concentrating on the resident experience from first contact through residency are seeing renewal rates strengthen; residents are prioritizing value, customer service, and predictability in their housing costs over the risk of moving.

Concessions aren’t going away soon. Operators in high-supply markets will likely face pressure well into 2027 as the pipeline of new units continues to absorb. A quick reversal to pre-pandemic norms is unlikely.

The deals that penciled two years ago don’t pencil today. Elevated Treasury yields, muted rent growth, and a renter base that’s more cautious and harder to close: that’s the environment. Underwrite accordingly.

What This Means for LP Investors

This environment asks more of passive investors, not less.

When debt costs are elevated and rent growth is muted, the margin for error in a deal compresses. Projected returns that looked conservative two years ago may be optimistic today. As an LP, the question isn’t just whether a deal is in a good market, it’s whether the sponsor underwrote it for the market that exists right now.

Look at the assumptions. What Treasury benchmark did they use to price the debt? What rent growth are they projecting in year one and two? What’s the exit cap assumption relative to today’s market? Conservative underwriting in this environment means lower projected returns, and that’s a feature, not a bug. Any sponsor promising 2021-era returns in a 4.5% rate environment with cautious renters and elevated concessions deserves scrutiny.

Thanks for reading Edition 4 of The Basis. If this added value, forward it to someone who should be reading it.

— Garrett