KBRA Credit Profile (KCP) attended the final day of the Commercial Real Estate Finance Council (CREFC) June conference, which included three engaging panels. The first addressed rising CRE operating costs, while the second and third focused on the lodging and office sectors, respectively. Key takeaways from each session are highlighted below.
Hitting the Bottom Line: Opex Drivers in CRE Investing
The first session featured a panel of industry leaders, including lenders, asset managers, and real estate developers, discussing the impact of rising costs on operating margins. Panelists shared insights on how expense pressures are reshaping underwriting standards, asset management strategies, and overall deal execution; property insurance and taxes were cited as specific areas of concern. However, some recent softening in U.S. insurance markets, along with increased participation from European carriers, has provided modest relief. Long-term expectations point to sustained operating cost…