Leveraged buyers of real estate typically finance with floating-rate debt, but more recently, the inverted yield curve allowed some owners to move to longer term fixed rate financings, reducing borrowing costs by over 100 basis points on a relative basis over the course of the last year. This allowed buyers to acquire at lower-entry yields (higher prices) leading to some level of continued transaction activity. Investors could even rationalize modest negative going-in leverage particularly in an environment where top-line revenue was growing robustly, and leverage effects could turn positive without heroic assumptions. The over 100 basis point rise in the ten year over last few months is removing this market cushion. Further, since exit cap rates are typically associated with longer-term interest rates, the increase in yield will pressure prices further. This is also occurring while top-line revenue growth slows for all sectors. Of course, interest rates could decline as much as they have increased over the last few months but given the current still inverted-yield curve, risks remain.