Run this scenario against your own deal

An owner budgets $272,000 a year to escrow toward an interest rate cap replacement in 2027. The servicer redetermines the reserve at current market pricing. The monthly mortgage statement goes up $86,700.
Every month. Through February 2027.

💸 Six payments. $520,200 that is in nobody's model.
Nothing about the loan, the asset, or the business plan has to change for that to happen. The cap market changed, and the loan documents obligate the borrower to follow it.

📈 Here is why. Through 2024 and 2025 the SOFR forward curve was inverted. It is not anymore. Futures are now pricing the federal funds rate near 4.50% by September 2027, against roughly 3.63% today. A cap covering 2027 prices off that 2027 curve. When the curve sat near 3.00%, most of what you bought was time value. At 4.50%, you are buying real protection, and the premium climbs steeply.
This is a curve repricing, not a volatility spike. Increases driven by volatility reverse on a calm week. This one will not reverse on its own.

🏢 If you own floating rate property debt with a cap replacement coming in 2027, three questions worth answering this week:

1️⃣ Can your lender resize the cap reserve in its sole discretion, and is a shortfall an event of default or only a cash sweep trigger?
2️⃣ Is your strike a fixed number or derived from a coverage test? Raising the strike is the most effective lever on premium, and it usually takes a lender amendment.
3️⃣ Is your extension option conditioned on delivering a replacement cap at the original strike? If that cap is now unaffordable, the option is illusory and your real maturity is earlier than your model shows.

📄 Pull the documents.
📊 Get a current quote.
⏰ Do it before the FOMC meets September 16, not after a notice arrives.

How many of your investments can absorb an unbudgeted $520,000 over six months?