Since landlords finance the bulk of U.S. real estate with debt, interest rates TMUBMUSD10Y, 3.807% play a major role in dictating market conditions. Terms were looser, and borrowers could take equity out of buildings based on record valuations, when financing was cheap and abundant in recent years, but the reverse has gripped properties in need of funding since the Federal Reserve began to rapidly increase rates by 500 percentage points in the past year.

Fed officials pulled the trigger on another hike of 25 basis points on Wednesday, bringing the policy rate to a range of 5%-5.25%, the highest level since 2007. Fed Chairman Jerome Powell also reiterated that rate cuts are unlikely soon.

“That puts pressure on valuations everywhere,” Rivera said. “There’s a whole face-off going on between borrowers and lenders, which is causing the machine to stop here.”