{
  "id": 12311294,
  "title": "The Surge in Rates Is Blowing Up Commercial Real-Estate Deals",
  "url": "https://urgent.news/2026/10/06/the-surge-in-rates-is-blowing-up-commercial-real-estate-deals",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-06T05:26:40.000Z",
  "source": {
    "name": "Hindustan Times - World News",
    "slug": "hindustan-times-world-news",
    "url": "https://www.hindustantimes.com/world-news/the-surge-in-rates-is-blowing-up-commercial-real-estate-deals-101791264312477.html"
  },
  "original_language": "en",
  "account": "Higher interest rates are triggering a surge in commercial real-estate transactions being renegotiated or abandoned. Investors who secured initial purchase prices earlier this year, when financing was more affordable, are now demanding price reductions or concessions from sellers to proceed. The acceleration in rates began in late summer, following a quarter-point Federal Reserve rate hike and warnings of further increases.\n\nCushman & Wakefield managing director Jeff Powers reported an uptick in calls from buyers seeking restructured deals after a recent rate hike. The typical six to twelve-month gap between contract signing and closing can significantly impact financing costs during periods of volatile rates. Matt Rosenthal, founder of Boca Raton-based Eastham Capital, secured a $600,000 price cut for a Midwest apartment complex by threatening to withdraw from the transaction.\n\nThese restructurings signal broader market distress, potentially impacting property values, slowing development, and complicating loan refinancing. Commercial real estate, which had been recovering, is now facing headwinds from the sudden rate surge. This downturn affects various property types, from office buildings to shopping centers and hotels.\n\nThe increase in interest rates not only affects property owners but also has repercussions for tax collections and the construction industry. Commercial real estate is highly sensitive to interest rates, as buyers typically finance a significant portion of property purchases. With over $5 trillion in outstanding commercial and multifamily mortgages, the industry is particularly vulnerable to changes in borrowing costs.\n\nEarlier this year, investors anticipated the Federal Reserve to lower rates, which boosted property values due to lower debt costs and higher yields on competing investments. However, the current mood has shifted as rates continue to rise, leading to a decline in property values. The FTSE Nareit All Equity REITs Index fell over 8% from late August through this week, while the S&P 500 gained 1%.\n\nHigher rates are also straining landlords as existing mortgages, taken out at lower borrowing costs, come due. Data shows that 11.42% of commercial mortgages packaged into mortgage-backed securities were handled by special servicers in August, the highest rate since February 2013. Lenders and investment funds still have ample capital to invest, intensifying competition for the most attractive projects. Despite the challenges, some lenders, like Northwind Group, are still able to secure loans for projects, albeit with increased loan pricing and conservative valuations.",
  "summary": "Property buyers are demanding sellers renegotiate terms because of higher mortgage rates, signaling broader market distress.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}