Will interest rate increase eliminate preferred returns?

[Chad Childress]

New LP syndication investor here dipping my toes in and looking to do my first deal this spring. With compression between CAP rates and debt service due to interest rates rising to a much more normalized historical level, will that eat up most of the cash flow on syndication deals?

I was planning on using a balanced approach from an investment perspective between cash flow and EM to generate passive income for FIRE.

Now I’m worried the cash flow component will be virtually gone (1-2%?),  and that also means lower total IRRs and EMs.

Are GPS broadly adjusting for increase financing costs? How is this going to affect the mix in the capital stack? Are the high historical returns now just pipe dreams?

Would I be better of just sticking with my brokerage account if the returns or more on parity with the stock market but much less liquidity?

Thank you