The yields on commercial mortgages have been approximately 2 percent higher, on average, than the yields on comparable maturity treasury securities over the past 15 years. Often considered the signature risk of commercial mortgage lending, this spread primarily represents:

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The spread of 2 percent higher yields on commercial mortgages compared to treasury securities primarily represents default risk, as it reflects the additional compensation that investors demand for the risks associated with potential defaults on these mortgages.

The Yields on Commercial Mortgages Have Been Approximately 2 Percent