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Rising interest rates can have a significant impact on commercial property sales prices. As interest rates increase, the cost of borrowing money increases, which can lead to lower demand for commercial real estate. This lower demand can result in a decrease in property values and ultimately, lower sales prices.

Historically, rising interest rates have had a negative impact on commercial property sales prices. During the 1970s and early 1980s, interest rates reached record highs, peaking at nearly 20%. During this time, commercial property sales prices declined significantly. Similarly, during the Great Recession of 2008, rising interest rates contributed to a decline in commercial property values.

However, it is important to note that the impact of rising interest rates on commercial property sales prices can vary depending on the overall economic climate. If interest rates are rising due to a strong economy with low unemployment and strong GDP growth, the impact on commercial property sales prices may be less significant. On the other hand, if interest rates are rising due to inflation and other economic concerns, the impact on commercial property sales prices may be more severe.

As a commercial property owner, it is important to be aware of how interest rates can impact your property’s value and take steps to mitigate any potential negative effects. This may include exploring alternative financing options, such as fixed-rate loans or assumable financing, and being proactive.