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CRE Carrying Costs Are Nearly as Burdensome as Interest Rates

Everyday expenses are rising so much that they’re affecting the viability of properties.

Little things can add up. For CRE, that is a range of costs including insurance, utilities, taxes, and other operating expenses. That can burden a property just as easily as higher interest rates.

According to a Moody’s Investor Service report cited by Barron’s, overall expenses for CRE properties are up by more than a third between 2017 and 2022. Insurance is up 73% over the last five years, utilities are 40% more expensive, and property taxes and other operating expenses rose 27% and 29% respectively.

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Erik Sherman

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