How Rising Interest Rates Impact Commercial Real Estate Executive Search

Introduction

The commercial real estate (CRE) industry is navigating a challenging landscape shaped by rising interest rates, which influence everything from property valuations to investment strategies. As rates climb, firms need executives who can manage financial complexities, optimize portfolios, and drive growth in a high-cost environment. Finding such leaders requires a specialized approach. A commercial real estate executive search firm like Executive Property Staffing, LLC is uniquely positioned to identify talent with the financial acumen and strategic vision to thrive in this market. In this article, we explore how rising interest rates are reshaping CRE executive hiring and how our firm helps you secure the right leadership.

The Impact of Rising Interest Rates on Commercial Real Estate

Interest rates have been a focal point in 2024 and 2025, with the Federal Reserve implementing incremental cuts after a peak in mid-2024. Despite these adjustments, rates remain elevated compared to pre-2022 levels, affecting CRE in several ways:

• Higher Borrowing Costs: CBRE’s 2025 Market Outlook reports that commercial mortgage rates averaged 6.5% in Q1 2025, up from 4.2% in 2021, increasing debt service costs for property owners.

• Declining Property Valuations: Rising rates have compressed cap rates, reducing property values by 10–15% in some markets, per JLL’s 2025 Global Real Estate Perspective.

• Shifting Investment Priorities: Investors are prioritizing cash-flow-positive assets, with 68% of CRE investors focusing on value-add opportunities, according to PwC’s Emerging Trends in Real Estate® 2025.

• Operational Pressures: Higher financing costs strain budgets, requiring executives to optimize net operating income (NOI) and explore creative leasing strategies.

These challenges demand leaders with expertise in financial restructuring, risk management, and market forecasting, making specialized executive search critical.

Why Interest Rates Reshape Executive Hiring Needs

1. Demand for Financial Expertise

Rising rates increase the need for executives like Chief Financial Officers (CFOs) or Directors of Capital Markets who can navigate high-cost debt environments. These leaders must secure favorable financing, manage leverage ratios, and implement cost-saving measures. For example, a 2024 Deloitte survey found that 62% of CRE firms prioritized hiring CFOs with experience in debt restructuring to counter rising rates.

2. Focus on Portfolio Optimization

With property valuations under pressure, executives must maximize portfolio performance. Leaders with expertise in repositioning assets or diversifying tenant mixes are in high demand. A 2025 CBRE report notes that firms with proactive portfolio strategies achieved 12% higher NOI growth than competitors in 2024.

3. Strategic Risk Management

Elevated rates introduce market volatility, requiring executives who can assess risks and pivot strategies. For instance, a VP of Investments with experience in interest rate hedging can protect your firm from financial shocks, a skill cited as critical by 55% of CRE executives in a 2024 EY study.

4. Investor Relations and Capital Raising

As investors grow cautious, executives must articulate a clear value proposition to secure funding. A 2025 JLL report highlights that firms with strong investor communication retained 20% more capital commitments during rate hikes, underscoring the need for leaders skilled in stakeholder engagement.

How a Commercial Real Estate Executive Search Firm Addresses These Challenges

At Executive Property Staffing, LLC, our commercial real estate executive search firm delivers leaders who can navigate the complexities of a high-rate environment. Here’s how we help:

• Access to Specialized Talent: Our network includes professionals with expertise in financial strategy, portfolio management, and investor relations, ensuring you find candidates tailored to your needs.

• Rigorous Vetting Process: We evaluate candidates for financial acumen, market foresight, and adaptability, using data-driven assessments to match them with your firm’s goals.

• Market-Driven Insights: Our team tracks trends like the 6.5% average mortgage rate reported by CBRE, enabling us to identify executives who can address current challenges.

• Efficient Placements: In a competitive market, speed is critical. Our streamlined process delivers top candidates in 6–10 weeks, minimizing disruption.

Case Study: Securing a CFO for a High-Rate Market

A regional CRE firm faced declining valuations due to rising interest rates in 2024. They needed a CFO to restructure debt and optimize a $300M portfolio. Executive Property Staffing, LLC conducted a targeted search, identifying a candidate with 12 years of experience in debt financing and asset repositioning. Within 8 weeks, the CFO was hired, reducing debt costs by 15% and boosting NOI by 10% through strategic tenant negotiations, proving the value of specialized search.

Strategies for Hiring Executives in a High-Rate Environment

To secure leaders who can thrive amid rising interest rates, consider these steps:

• Prioritize Financial Expertise: Seek candidates with experience in debt management, hedging, or capital markets to navigate high-rate challenges.

• Focus on Adaptability: Choose leaders who can pivot strategies, such as shifting to value-add investments or renegotiating leases.

• Leverage Market Data: Use insights from reports like PwC’s Emerging Trends to define the skills needed for your market.

• Partner with Specialists: Work with a commercial real estate executive search firm to access a curated pool of financially savvy candidates.

Conclusion

Rising interest rates are reshaping the commercial real estate landscape, demanding executives who can manage financial pressures, optimize portfolios, and secure investor confidence. Executive Property Staffing, LLC, a leading commercial real estate executive search firm, connects you with leaders who turn challenges into opportunities. Ready to strengthen your leadership team? Contact us today to start your executive search.