Are the interest rate increases make you change your underwriting

[Marc C.]

Residential interest rates have risen about .5% since the election. Now I've noticed they are up about .25% on commercial/apartment loans as well. http://www.crefcoa.com/apartment-rates-main.html

The strong stock market is attracting investors away from bonds, causing bond rates to rise to compensate. This will continue as long as stocks keep rising. 

Since these rates are based on 6-mo. LIBOR rates, http://www.wsj.com/mdc/public/page/2_3020-libor.ht..., which haven't risen much at all, I'm not sure why the increase in apartment financing rates. Anyone have a theory? 

So, investors, is this affecting your numbers, your analysis, your underwriting? 

It wouldn't take much more of a rise to cause some folks to want to back out of deals and for cap rates to widen. If you were buying a 7 cap with 4% money, will you be looking to retrade into a 7.5% cap if money rises to 4.5%? Seems logical.

It's making me nervous about the two deals I'm working. One is a Master Lease-Option with a 3-year time limit...who knows what rates might be in 3 years?