As of September 2025, the Federal Reserve trimmed rates for the first time in nearly a year — a quarter point, bringing them down to 4–4.25%. They’re hinting at more cuts before the end of the year.
Whether you own, lease, or are about to make a move with your company’s space, interest rates shape the playing field in commercial real estate.
Why Business Leaders Should Care About Federal Reserve Rate Cuts
When rates drop, landlords and lenders don’t just sit still — they adjust. And those shifts can hit your business in real time:
- Financing gets cheaper. If you’ve got loans coming due, this could save you real money.
- Valuations tick up. Lower rates push cap rates down, which makes properties look more valuable on paper. That changes how landlords strategize to fill their vacancies and execute transactions.
- Landlord confidence grows. Suppose property owners believe their commercial real estate value will be worth more tomorrow. In that case, they may be more aggressive when negotiating to secure higher rental rates and landlord-friendly terms today.
What Federal Reserve Rate Cuts Mean for Your Commercial Real Estate
- If you lease space: Don’t assume lower rates mean your landlord will offer concessions. In many cases, it empowers them to negotiate more aggressively. A strategic negotiation strategy and a commercial real estate advocate who is free from conflicts of interest remain critical.
- If you own your building: This is a window. Lower debt costs could mean refinancing into a better position. Timing is key, as lending standards can tighten even while rates fall.
- If you’re growing or expanding: Projects paused during higher rate periods may now be worth revisiting. But don’t forget: construction costs and labor aren’t going down just because rates did.
- If you’re thinking about selling: Lower rates often increase buyer demand. If you’re sitting on an asset that’s not core to your business, this could be your moment to capture value.
The Bigger Picture
Rate cuts don’t signal that the economy is booming. Instead, they often reflect concerns such as slowing job growth or persistent inflation.
That means you’ve got two competing realities:
- Cheaper money creates opportunity.
- Economic headwinds are creating risk.
Smart decision-making means recognizing both.
Bottom Line
If your only focus is on a lease expiration date or waiting for your lender to call, you may already be behind schedule. Landlords and lenders are recalculating right now.
Action steps for leaders:
- Re-run your financial models.
- Stress-test your leases.
- Evaluate refinancing opportunities.
- Stay proactive in discussions with landlords and lenders.
The Fed just shifted the field — ensure your strategy keeps you on offense.
Sources:
USA Today – Federal Reserve September Rate Cut Updates
Federal Reserve - Monetary Policy Announcement
Disclaimer:
This content was prepared by the Keyser editorial team. It is provided for educational purposes only and should not be construed as legal or financial advice.
