Inspired by a “booming economy” in 2022 the Federal Reserve Bank hikes benchmark lending rates by a total of 3.0%. Without prejudice as to why the economy was categorized or the resulting actions of the Federal Reserve, we exist today in a rising interest rate environment that hasn’t been seen in twenty years or more.
What began as good news of a robust economy could end with the harsh reality of the rate hike impacts on owners of commercial real estate, their lenders, and you.
Rising interest rates on borrowings create two fundamental challenges for commercial property owners; 1) debt service payments will increase, while 2) property valuations may decrease. The intersection of these two challenges can be where the banks get involved.
What began as good news of a robust economy could end with the harsh reality of the rate hike impacts on owners of commercial real estate, their lenders, and you.
Rising interest rates on borrowings create two fundamental challenges for commercial property owners; 1) debt service payments will increase, while 2) property valuations may decrease. The intersection of these two challenges can be where the banks get involved.
