2025 Summer Leadership Series – How Tariffs and Treasury Volatility Are Shaping Investment Strategy

In the eleventh installment of Connect Money’s 2025 Leadership Series, senior executives from across the alternative investment landscape shared how they are navigating the dual challenges of tariff-driven market shifts and heightened Treasury yield volatility. 

The conversation explored whether tariff policies are prompting firms to adjust investment strategies or alter client communication around portfolio risks. The discussion also centered on the moves in the U.S. 10-year Treasury yield and how they are influencing financing choices. 

The discussion includes Jordan Lang, President, McCourt Partners; Garett Bjorkman, CEO, PEG; Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC; Jay Frank, President, Cantor Fitzgerald Asset Management; and Warren Thomas, Co-Founder and Managing Partner, ExchangeRight. 

Are tariffs prompting changes in investment strategies and how are you addressing client concerns about tariff-related portfolio risks?    

Jordan Lang

Jordan Lang, President, McCourt Partners: The biggest challenge tariffs create is uncertainty. It’s not just about cost increases; it’s that developers and contractors can’t reliably price materials like steel, aluminum, or drywall. That instability has made some deals harder to underwrite, which has slowed investor appetite in new developments. In response, we’re seeing some developers adjust designs to reduce exposure to tariff-sensitive materials. For example, we’ve leaned more on concrete in certain projects simply because the cost is more predictable than steel right now. That’s not ideal from a design standpoint, but it reflects how real the volatility is. At McCourt Partners, we’re in a unique position to invest competitively and leverage our permanent capital to make selective investments with a longer-term perspective. 

Garett Bjorkman, CEO, PEG: Tariffs have not fundamentally shifted our long-term investment strategy, but they have introduced pockets of risk that we manage actively. In development, we conduct early buyouts, evaluate alternative sourcing, and build cost contingencies into our budgets. We also collaborate closely with general contractors and suppliers across global geographies to mitigate exposure where possible. In the hospitality sector, where case goods and soft goods are often imported, we have redirected orders to countries with more favorable trade terms and incorporated increased costs into our underwriting. 

Garett Bjorkman

The impact of tariffs extends beyond materials. At times, we’ve observed reduced international travel tied to geopolitical rhetoric, and we monitor these trends closely. While the broader tariff environment remains in flux, our approach emphasizes transparency, flexibility, and strategic risk allocation—which resonates with our investors. 

Tony Chereso

Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC: We are rethinking how we operate amid this tariff-driven uncertainty. Rather than reacting impulsively, we are reviewing existing investments, focusing on tenant credit quality, and seeking clarity when deploying our investment capital. When it comes to our development projects, for example, we’re assessing near-term cost inflation, delivery delays, and financial buffers. There’s also a growing tactical tilt in the industry toward repositioning existing assets instead of initiating expensive new construction; this tactic produces quicker development cycles and lower exposure to tariff shocks. 

The current volatility in the U.S. 10-year Treasury yield is reshaping decision-making. Are you rethinking financing strategies, possibly delaying investments or seeking alternative funding sources?  Are you lengthening, staying short, or hedging rates more actively given the Fed’s uncertain path? 

Jay Frank, President, Cantor Fitzgerald Asset Management: The story for us is not day-to-day volatility but a structurally higher rate backdrop. With the 10-year Treasury yield above 3.5% since 2022 and sitting in the low to mid 4s for most of the past year, commercial real estate has significantly repriced. In the $75 million to $150 million multifamily price range where we are most active, cap rates are around 5.5%, up from the low 4s in 2021 and 2022, which we now view as an attractive entry point.  

Jay Frank

New multifamily starts are down nearly 50% from their mid-2022 peak, pointing to an emerging supply deficit that we anticipate will support future rent growth. The monthly cost of owning a home now exceeds comparable rent by about $1,200, nearly three times the 20-year average, which is sustaining robust tenant demand. After sitting on the sidelines for over a year as prices reset, we are active buyers. For our core strategies, we typically pair acquisitions with long-term, fixed-rate agency debt from Fannie Mae and Freddie Mac, capturing positive leverage today and matching liability duration to our business plans. 

Warren Thomas

Warren Thomas, Co-Founder and Managing Partner, ExchangeRight: Volatility in the 10-year Treasury has introduced a level of uncertainty that is reshaping both capital planning and investor sentiment. At ExchangeRight, we have long maintained conservative leverage and a disciplined approach to debt structuring, principles that are proving especially critical in the current environment. We are not delaying investments; instead, we are structuring them to perform under a range of market conditions.  

For example, as we have done historically, we intend to continue releasing all-cash DST offerings to eliminate refinancing risk and meet investor demand for unleveraged, tax-advantaged, real estate investments. Some of these are structured with an accelerated two-year exit into our Essential Income REIT. We also have historically released and intend to continue offering moderately leveraged DSTs that maintain attractive debt coverage ratios in the current interest rate environment. 

At the REIT level, we have implemented a predominately fixed-rate, long-duration financing strategy to minimize exposure to interest rate volatility and refinancing risk. This approach reflects our view that in the face of uncertain Fed policy, fixed-rate debt provides a more stable foundation for sustained portfolio performance. While the market responds to short-term data and speculation, we are focused on providing investors with capital preservation and stable income throughout the business and interest rate cycles. Interest rate declines may provide us with some nice financing opportunities, so we are watching the market and will be quick to lock in advantageous rates when the time is right. 

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