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Higher Rates Force CRE Buyers to Revisit Deals as Loan Maturities Loom

Article originally posted on Globe St on Oct 7 2026

Rising interest rates are forcing commercial real estate buyers to revisit deals priced months ago, but the pressure could also create openings for investors ready to act. As higher borrowing costs squeeze returns and widen the gap between buyers and sellers, a coming wave of loan maturities could push more owners to adjust their expectations and give lenders a larger role in driving transactions.

Some buyers are already threatening to walk away unless sellers agree to better terms, The Wall Street Journal reported. Others are reworking capital structures, scrutinizing exit assumptions or looking for tax benefits that could improve returns.

The divide is becoming clearer, with some owners seeking financing to avoid selling at lower prices, while buyers with capital available are waiting for opportunities to emerge.

Higher Rates Put Agreed Prices Under Pressure

Commercial real estate transactions typically take six to 12 months to close. That leaves deals exposed to changes in borrowing costs between when buyers agree to a price and when they finalize financing.

For transactions negotiated earlier in the year, rising rates are putting those prices under renewed scrutiny. Buyers are returning to sellers to renegotiate—a practice known as re-trading.

“Rates went up, what, just a few days ago and I’m already getting calls where they’re talking retrade,” Jeff Powers, a Cushman & Wakefield managing director, told the Journal last month.

The pressure could make it harder to bring buyers and sellers together.

“We think in the near-term the deal environment will become more difficult, as bids and asks move further apart,” Joe Biasi, managing director and head of commercial capital markets research at Newmark, tells GlobeSt.com.

Biasi expects a sustained increase in interest rates to push cap rates higher and says anecdotal evidence suggests that shift has begun. But a clearer outlook for borrowing costs could also help the market move forward. If investors no longer expect rates to fall, he says, “that removes a significant factor in what caused the market freeze when rates ran up in 2023.”

Buyers Rework Financing And Return Assumptions

Rather than abandon transactions outright, some investors are changing how they structure and evaluate them.

Michael Torhan, a real estate tax partner at EisnerAmper, says higher interest rates and broader inflationary pressures are prompting market participants to rethink their near- and medium-term strategies.

“Dealmakers have been considering how capital structures are created for deals and potential creative ways to alter those structures,” Torhan tells GlobeSt.com.

Tax planning is also part of that work. Real estate principals are examining whether tax benefits can improve after-tax internal rates of return or attract investor capital seeking those benefits, he says.

Other buyers are taking a closer look at the assumptions that determine whether a deal remains viable. Lance Bergstein, CEO of Lincoln Equities Group, says the firm continues to underwrite transactions but is applying additional scrutiny.

“We are testing the models to make sure that the deal is not too sensitive to exit cap rates.”

Loan Maturities Could Bring More Opportunities

Higher rates have not yet derailed every buyer’s plans.

“We are seeing some erosion in the returns from the recent increase in rates, but so far it has been incremental and not enough to cause us to walk away from any deals,” says Adam Abeln, managing director and chief investment officer at Real Capital Solutions.

For investors still prepared to buy, the more consequential shift may come as owners confront approaching loan maturities.

“Many of my clients stand ready to move on opportunities,” says Mark Leverette, a partner at BPM.

“After months of delaying decisions, the market is approaching an inflection point. With a significant wave of loan maturities ahead, many owners will need to adjust expectations, and lenders could increasingly drive transactions, creating opportunities for well-positioned buyers.”

That prospect gives investors another reason to stay engaged, even as current deals become harder to complete. Owners’ financing needs could bring transactions to market that months of price negotiations have failed to produce.

Sellers Seek More Time With Bridge Financing

Some sellers, however, are looking for ways to meet their financing needs without accepting a lower sale price.

Scott Singer, co-lead of Avison Young’s Tri-State Debt & Equity Finance team, says the firm is seeing owners turn to bridge financing amid rate volatility.

“Rather than accept lower pricing, bridge financing allows owners to secure liquidity today while preserving the ability to sell later when market conditions stabilize,” Singer tells GlobeSt.com.

For those owners, bridge financing offers time rather than an immediate exit. For buyers, it means higher borrowing costs will not necessarily translate into lower prices right away. The next round of transactions will depend in part on which sellers can afford to wait and which must act as their loans come due.

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