Real estate investment trusts (REITs) and the broader real estate sector experienced a significant pre-market decline, with the Vanguard Real Estate ETF (VNQ) falling 2.52%. The primary catalyst appears to be a sharp increase in U.S. Treasury yields, with the 5-year Treasury yield surpassing 5% for the first time since 2007. This surge in yields is creating headwinds for interest-rate-sensitive sectors. Higher borrowing costs negatively impact the profitability and valuation of REITs, which rely heavily on debt to finance their property portfolios.