The 10-year Treasury yield is more important in much of CRE than whatever level of federal funds rate that the Federal Reserve sets. That’s why the direction of the benchmark's price and yield, which move inversely, and other federal bonds will be making many investors, property owners, and developers nervous.

At the end of Tuesday, the yield on the 10-year closed at 4.679%. The number has been bouncing around for months, but generally trending upward for a while. The 30-year, which closed at 4.836%, hit the highest yield seen in about 14 months. Returns on both have risen 40 basis points in the last month.

In addition, the Treasury Department is selling $39 billion of 10-year bonds and $22 billion of the 30-year. That will add more supply, likely driving prices down further and yields upwards. But there are other factors at work. Tariffs would likely increase inflation and bond investors then look for higher yields for the future. An auction of $58 billion in 3-year notes on Monday resulted in poor demand, which also reduces prices and increases yields, reducing expectations for later in the week.