What shapes property value?
- 1 day ago
- 2 min read
Updated: 8 hours ago
Real estate value is determined by interest rates, but is shaped, to a great extent, by asset management and the risk premia that comments on the success, or otherwise, of that management.
One of the advantages of managing commercial real estate through the lens of a property finance background is that it creates an acute awareness of the importance of property ownership "events" such as rent reviews, lease renewals, opex contracts, capital expenditure, loan renewals, and so on, but also on the risks that can have a greater impact than those more basic, but still critical, administrative functions.
In essence that lens anchors thinking around risk, and how these risk events contribute to where a property is likely to "sit" at loan expiry, to whether or not value and cash flow are sufficient to meet both ongoing obligations and, ultimately, to the requirement to repay debt. After all, the main skill in property finance is not how to get money out the door, it's how to get the money back!
This is our approach and it means these events are optimised rather than undervalued or missed. We take every opportunity to ensure that a property is in the best state possible at any point in time, so that it is best able to react to the changing economic environment.
Missed rent reviews, unnecessarily concentrated lease expiries, unallocated or unclaimed opex, no assessment of refinancing risk, missed opportunities to regear leases, early debt refinancing, or poorly timed revaluations, are all costly and can be avoided with the right approach.
What have we been looking at this month?
What have we been looking at this month? Some of the research and commentary on current risks we have found insightful can be found here. If you wish to discuss any of these articles and how they are relevant today please get in touch.
Risk is elevated at present: The impact of AI, ESG, construction costs, business failures and the spectre of rising interest rates all pertain. Are you ready? Contact us to find out.
By Tascott & Co
June 2026
