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"I think it's almost impossible to avoid some slowdown if rates rise, but it's not a perfect correlation," Flexner said. "If they go up another 50 basis points, the damage both on the residential side and commercial side is probably limited. If we approach a 4 or 4½ percent 10-year down the road, then it's going to have consequential impact, I think, on housing demand, as well as commercial real estate values."
Flexner also explained how differently rising rates could affect commercial real estate.
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"I think the commercial side is arithmetic. The cost of capital in real estate is the cost of good soul because it's so capital intensive. And the cost of debt is a primary component," he said.
"Investors have required returns and expected returns, and when you start raising the cost of debt in commercial, it has a two-fold effect. One is it's costing you more in debt service. But the other is, you can borrow less because a given income stream can always support a certain amount of debt service. So, your proceeds go down and the costs go up, and ultimately that does factor into gross asset values."
— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.
— CNBC's Stephanie Landsman contributed research to this report. Follow her on Twitter: @StephLandsman.
Trader disclosure: On Sept. 11, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long EEM; Steve Grasso is long DHI; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long GM; Karen Finerman is long MDY PUTS; Dan Nathan is long GE; Dan Nathan is long IBM; Dan Nathan is long TSLA; Dan Nathan is long VIX; Dan Nathan is long CAT; Dan Nathan is long MSFT; Dan Nathan is long FXI; Dan Nathan is long WFM; Dan Nathan is long ZNGA; Dan Nathan is long XCO.