In the ever-changing landscape of commercial real estate, understanding the impact of rising interest rates is crucial. As noted by experts at EY-US, a strong economy can sometimes offset the negative impacts. Various factors such as economic growth, inflation, and market conditions influence this complex relationship.

It is essential to consider the direct and indirect effects. Higher interest rates often lead to decreased property values due to the reduced cash flow (JP Morgan) to a new purchaser. This has limited effects on current property owners with a fixed mortgage rate but will impact potential purchasers needing new financing. Trying to recapture those increased holding costs in rents can also lead to increased vacancy rates as higher costs may deter new tenants.

So, what strategies can investors employ to mitigate these impacts? Proper research and due diligence are key to making informed decisions (Plante Moran). Locking in current rates with fixed-rate mortgages can protect against future rate increases, and diversification across different asset classes can also provide a hedge against interest rate risks.

Reports indicate that increased borrowing costs have led to a decline in commercial retail property values. Real-world examples and expert insights further underscore this relationship. As interest rates increase, the cost of owning increases, resulting in either the return to the equity declining and/or an increase in the capitalization rate. To date, for some property types, market demand has remained strong resulting in little decline in value noted in the Quad Cities.

Staying informed and adaptable is crucial in this dynamic interest rate environment. With the right strategies and a keen understanding of market dynamics, it is possible to mitigate the profound impact that rising interest rates can have on the commercial real estate market, say experts at Kearny Bank.

For more insights, check out our blog post on What Changes the Value of Commercial Property. If you think you might need a commercial real estate appraisal, feel free to explore our services or contact us for further discussion.

When catastrophic losses occur, such as fire, natural disaster, or structural failure in a building component, the role of an appraiser becomes critical. Appraisers are often called upon to assess the extent of the damage and provide an accurate valuation of the property post-disaster. This valuation is essential for insurance claims and can significantly impact the recovery process for property owners.

Appraisers, like ours at Roy R. Fisher, are trained to handle these situations with professionalism and precision. Appraisers must consider various factors. These include the extent of the damage, the feasibility and cost of repairs, and the impact on the property’s overall value. They understand the importance of their role in the recovery process and strive to provide fair and accurate appraisals.

In some catastrophic loss cases, appraisers can be called on to provide expert testimony. Their unbiased, professional opinions can greatly aid in resolving disputes between insurers and policyholders. They provide an objective assessment of the property’s value, which can help ensure that victims are adequately compensated for their losses.

At Roy R. Fisher, we understand the importance of appraisal services in the aftermath of catastrophic loss. Our team of experienced appraisers is committed to providing fair and accurate valuations to help property owners, lenders and insurance companies navigate the recovery process. If you’ve experienced a catastrophic loss and need an appraisal, contact us today. We’re here to help.

For more information on our services and the appraisal process, check out our services page and our blog post on translating complex commercial property language.

We are proud to announce that Roy R. Fisher has been approved by the Iowa Department of Transportation to provide On-Call Right of Way Valuation Services.

The expertise in our firm allows us to help provide Appraisal and Appraisal Review Services for right of way acquisition purposes by the Iowa Department of Transportation. These services play an important role in the Iowa economy as well as protecting the rights of property owners in the acquisition process.

You can learn more about On-Call Right of Way Valuation Services at the Iowa Department of Transportation website at: https://iowadot.gov/rightofway