The market value of real estate is closely tied to the cost of money. As interest rates increase, so do the investment expectations of real estate investors. Overall, capitalization rates for an investment in commercial real estate have stayed at very low levels over the past decade. In great part, the cost of funds for investment has remained very low. One of the best indicators of the cost of funds is reflected in the federal funds rate. As shown on the table, the cost of money to lending institutions remained at 0.25% for seven years. Recently, the federal government elected to increase this rate to its current level of 2.5% with several bumps over the past two years. As the cost of funds increase, most investors look for increasing yield and overall capitalization rates in most types of commercial real estate.