Unlevered yield is the return on investment that an investor would expect if they were to purchase an investment without any debt. In other words, it's as if the deal was done with all cash and no debt. This number is a conservative way of calculating the return on investment and is important for investors to consider when making investment decisions.
Debt can be a powerful tool that helps you grow rapidly. However, debt can make a bad deal look artificially good because it seems like you're returning more cash when, in fact, you're just borrowing more money.
Additionally, when you consistently rely on debt to finance your deals, it may result in tricky situations when financing dries up. In the 2008 Financial Crisis, many financial institutions didn't want to provide more debt for housing investments. More recently, Evergrande is a good example of how debt and leverage can bring cascading risk to multiple businesses.