Every week I talk to owners who are waiting. In Los Angeles, in Texas, in New York, it’s the same conversation. Waiting for rates to come down before they refinance. Waiting before they sell. Waiting before they buy the next one.
Most of them are working off a story that was true a year ago. It isn’t true anymore.
What actually happened
The Fed cut rates three times to close out 2025. Everyone read that as the start of a trend. Then it stopped. The Fed held through the spring and summer, and in September it did something nobody was planning for. It raised rates, the first increase since 2023. In October it held again, and two members of the committee wanted another hike. Markets are now pricing a strong chance of one more increase in December.
Read that again. The direction changed. The people who set rates are talking about going up, not down.
If your plan for 2027 is built on cheaper money arriving, you need a new plan.
The Fed rate isn’t your rate anyway
This is the part most owners miss. Your loan doesn’t price off the Fed funds rate. Commercial debt prices off the 10-year Treasury, plus a spread. Lenders have been quoting somewhere around two to three points over the 10-year for most deals.
So even when the Fed was cutting, a lot of owners were surprised their refinance quote didn’t move. The long end of the curve has its own opinion, and it’s been stubborn.
What that means in plain terms: the cost of money you’ll actually get quoted in 2027 is going to look a lot like what you’d get quoted today. Maybe a little worse. That’s true whether your building is in California, Florida, or Ohio. The Treasury market doesn’t care about your zip code. Plan on that.
Three owners, three different problems
If your loan matures in the next 24 months. This is the group I’m most worried about. A lot of these loans were written at 3.5 to 4.5 percent. The replacement loan will be higher. Run the numbers now, not when the lender sends the notice. If the new payment doesn’t work on today’s rents, you have three choices: raise NOI, bring in equity, or sell while you still control the timing. Every one of those takes months. The owners who wait until 90 days out are the ones who end up taking whatever deal is on the table.
If you’ve been thinking about selling. Here’s the honest math. Buyers price off their cost of debt. If debt doesn’t get cheaper, cap rates don’t compress, and your price doesn’t go up on its own. The value you add in 2027 comes from the building, not the market. Rents, expenses, deferred maintenance, vacancy. If the building is already performing, waiting for a better rate environment is costing you a year of carrying it for no gain.
If you’re sitting on cash or coming out of a sale. This is the best position to be in right now. Fewer buyers can make the numbers work, which means less competition on good assets. Sellers who need to move are negotiating. Cash and certainty of close are worth real money in this market. I’m seeing exchange buyers get terms today they couldn’t have gotten eighteen months ago.
What I’m telling clients
Stop underwriting to a rate you hope for. Underwrite to the rate you can get quoted this week, and make sure the deal works at that number. If it only works because rates fall, it doesn’t work.
Buy cash flow, not a forecast. The deals that make money in this environment are the ones that pay you from day one. Cap rate compression is a bonus, not a strategy.
Get in front of your maturity. If you have debt coming due in 2027 or 2028, we should be talking now. The best outcomes I’ve seen this year came from owners who started twelve months early.
Use the market, don’t wait for it. Higher rates thin out the competition. That’s a problem if you’re selling a mediocre building. It’s an opportunity if you’re buying a good one.
Bottom line
Rates went up. They may go up again. The owners who do well in 2027 are the ones who accept that and run their numbers on reality. The ones who wait for a rate that isn’t coming will spend another year standing still.
If you own commercial property anywhere in the country and want to know where you actually stand, reach out. We’ll run the numbers together and you’ll have a clear answer in one conversation.
One West Group | eXp Commercial
Investment Advisory | Capital | Brokerage
Market commentary dated November 6, 2026. This article is provided for general information and does not constitute lending, legal, tax, or investment advice. Property owners should consult qualified lenders and professional advisers regarding their individual circumstances.