Risk free treasury bond rates can affect cap rates.

@Jon Abadia I have a 14 unit under contract and have 3 approvals from commercial lenders #1 - 4.25%, 20 yr, 20% down#2 - 4.35%, 20 yr, 25% down, 5 yr readjust - 5 yr treasury plus 3.5%#3 - 4.5%, 20 yr, 25% down, 5 yr readjust - 5 yr treasury plus 3.25%

In these cases, I would look at that as a deferred down payment, so you have time value of money as those funds can sit in a Treasury bill or high yield savings, or be invested elsewhere based on your risk tolerance.

The real question is, will the new larger spread between the 10 year treasury and the mortgage backed securities that our individual 30-year mortgages feed into, remain in place?

For others, treasuries are returning 5% passively. 

With a good 3rd party management company you're doing pretty well with the $4m invested.Then I'd toss the other $1.3m into short term (~5.5%) treasuries to make an extra $70k/year of interest income.In a few years, after the market has gone back up and I've added some value, I'd refi the two buildings with a local bank.  

Generally, Treasury Regulations section 1.469-4 permits grouping of activities in your real estate portfolio to meet the material participation requirements, but if you elect to group then these activities must exceed 500 hours and there are special rules for which activities can be combined and minimum participation for each group activity. ...

Also, not exactly mortgage rates, but just to put things in historical perspective:Historical 10 Year Treasury Rates

Right now I'm taking 5.5% on short term treasuries but I think the risk premium is worth it for this.  

Hedge funds were the biggest “welfare queens” since the treasury pledged to buy junk bonds.