Global bond markets are under siege and CRE is caught in the crossfire.

UK 30-year gilt yields surged to their highest level since 1998, and volatility in U.S. Treasuries has repeatedly brushed them against 5%.

For commercial real estate, that means more expensive debt, climbing cap rates and global investors second-guessing allocations.

Christopher Stanley, banking industry practice lead at Moody’s Analytics, said the tightness of the spread shows increased competition in the market, but the entire yield curve has moved up considerably.

That’s going to hit net operating income, and Stanley said staying on top of liquidity and forecasting out volatility all the way through the life cycle of the project have become crucial.

“When we’re in a nervous economy like we’re in right now, everyone immediately jumps to what kind of credit problems are there going to be,” Stanley said on the show. “Credit is a part of it, but we’re really playing a balance sheet management game.”