CRE Leaders See Investors Turn to New Funding Sources Amid Treasury Volatility

Given the extended timeframe over which real estate decisions play out—whether in the acquisition space or in development—investors tend to proceed with caution. That’s especially the case in an environment such as the current one, where yields on 10-year Treasuries are riding a rollercoaster. Against this backdrop, Connect CRE asked key industry figures participating in our Summer 2025 Leadership Series what they’ve been seeing as they work with clients. Below, you will find insights from Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC, and Greg MacDonald, co-founder and CEO at Ballast Investments. 

The current volatility in the U.S. 10-year Treasury yield is reshaping CRE decision-making, with increased costs, lower valuations, and cautious investor behavior at the forefront. Has that changed how owners think about financing? Are they rethinking financing strategies, possibly delaying projects or seeking alternative funding sources?  Are they considering locking in rates now to avoid further increases? 

Tony Chereso: Overall, I see a cautious, “survival mode” market – strategic projects only, a heavy scrutiny on debt terms, and new capital sources to fill gaps. Alternative investment and management firms are stepping in to fill in and fund the voids that banks are leaving. 

Yes, whenever this type of rate volatility is present, locking in protection is common. Our firm looks to preemptively fix rates to avoid surprises. Even if the Fed doesn’t move, the long end of the yield curve swings can change borrowing affordability overnight. Therefore, we prefer to protect ourselves against future rate surprises. 

Greg MacDonald: We’re seeing more sponsors explore alternative capital stacks—preferred equity, debt funds, and programmatic JV equity—just to get things moving. Some projects have been paused or resized, especially if they were reliant on floating-rate debt. Fixed-rate execution, even at higher rates, is often viewed as a trade-off worth making to gain predictability and reduce interest rate risk. 

Institutional investors in particular seem to be adjusting their lens. How is that reshaping competitive dynamics in the multifamily sector? 

Greg MacDonald: There’s a real shift away from “capital-first” firms toward platforms that can actually operate. That’s especially true in multifamily, where tenant experience, local compliance, and real-time responsiveness directly impact value. Investors want to work with groups that can not only acquire assets but truly manage, problem-solve, and outperform. Scale and accountability matter more than ever.