Daniel A. Kaskel, chair of the firm's Real Estate, Corporate & Land Use Practice Group, wrote an expert opinion column for the Daily Business Review, published on Law.com on October 28, 2026.
His starting point is the Federal Reserve's September 16, 2026 decision to raise the federal funds rate by 25 basis points, to a target range of 3.75% to 4%. The quarter point matters less than what it signals. Investors, developers, and homeowners should treat higher rates as a continuing factor in underwriting and stop counting on cheaper money arriving soon.
Commercial property feels it first, because higher borrowing costs push capitalization rates up and values down. His example: a property earning $1 million in net operating income is worth $20 million at a 5% cap rate and about $16.67 million at 6%, with nothing about the building changed. Refinancing may be the bigger problem. A $20 million loan at 4% carries about $800,000 in annual interest. Refinanced at 7%, that becomes about $1.4 million.
The column also covers which property types are most exposed, why a Fed move does not translate directly into 30-year mortgage rates, and what disciplined underwriting looks like now: stress-test financing at today's rate and at likely refinancing rates, test values at higher cap rates, avoid excess leverage, and plan for loan maturities early.