The cost of borrowing touches nearly every part of a commercial property deal. When lending rates climb, a building that penciled out as a sound investment one year can look like a stretch the next, even if nothing about the property has changed. People who have built companies in more than one industry usually see this early.
Howard Wilner, who founded Automax Preowned in 1990 and later moved into commercial property acquisitions, has worked in two fields where the financing terms often decide whether a transaction closes at all.
Rising rates don’t stop property from changing hands, though the buyer pool shrinks, offers come in lower, and deal structures get more complicated. The sections below walk through how higher borrowing costs alter the math of a commercial purchase, what buyers and sellers are doing in response, and which habits from running operating businesses in competitive markets carry over well to property investing.
Why Borrowing Costs Sit at the Center of Every Deal
Most commercial property purchases rely at least partly on debt, which makes the interest rate one of the most important numbers in an acquisition and often as important as the purchase price. As rates go up, the monthly payment on a loan of the same size goes up too. A property’s rent doesn’t move much in the short term, so whatever cash is left after the loan payment gets thinner.
Lenders watch that relationship closely. Most want to see a property’s income cover its loan payments with room to spare. Once higher rates push the payment up, that same income can only support a smaller loan. A buyer who once could borrow enough to close at a certain price may now come up short, and the gap has to be filled with more equity, a lower price, or a decision to walk away.
Rate changes move through the market fast for that reason. A shift in borrowing costs changes what a property is worth to a buyer before anything changes about the building, its tenants, or the neighborhood.
The Widening Gap Between Buyers and Sellers
One of the clearest effects of rising rates is the distance between what sellers expect and what buyers can justify. Owners tend to anchor asking prices to values set back when financing was cheaper. Buyers have to underwrite with the loan terms on offer today. When those two views drift apart, fewer deals close, and the ones that do usually take longer to get there.
Closing the gap is mostly a matter of negotiation, and each side has to understand what the other is working with. A seller might be unable to take a lower headline price because of their own debt or tax situation, while a buyer might not be able to stretch any further without putting the investment at risk. Good negotiators look for terms that answer both concerns, since fighting over one number tends to stall.
Howard Wilner credits his own success to his educational background and his talent for negotiation. Preparation paired with deal-making skill is what this market pays for, because bridging a seller’s expectations and a lender’s requirements almost never happens on the first offer.
How Deal Structures Are Changing
When conventional financing costs more, buyers and sellers often get creative with how a deal is put together. Some buyers bring a larger equity contribution so they can borrow less. Others look at seller financing, where the current owner carries part of the purchase price as a loan, an arrangement that can help both parties agree when bank terms are tight. If an existing loan permits it, assuming the seller’s financing is another way to make a purchase work.
Buyers have also grown more careful about the assumptions underneath their plans. A strategy that counts on refinancing at a lower rate in a few years carries real risk if rates stay high. Plenty of investors now run their numbers against several possible outcomes, and they lean toward properties whose current income can carry the debt without depending on future improvements.
Variable-rate debt needs a closer look. The starting payment may be lower, but the borrower is exposed if rates keep climbing. Fixed-rate financing can cost more up front, though it gives an owner a predictable payment to plan around.
Lessons From Howard Wilner’s Career in Auto Retail and Property
Commercial real estate is not the only field where financing shapes the customer relationship. At Automax Preowned, the dealership launched by Howard Wilner in 1990, a dedicated finance department helps customers with less-than-stellar credit secure loans tailored to their individual financial situations. The same idea applies to property: a deal holds up when the financing fits the buyer’s actual circumstances, and it falters when built for an idealized version of them.
Automax’s growth offers another useful lesson. The dealership expanded to seven locations before consolidating into two flagship outlets, a path he attributes to carefully applied strategy and a customer-first approach rather than chance.
A sound plan can call for expansion at one point and consolidation at another. With rates higher, property investors face a similar choice between adding assets and concentrating on the holdings that perform best.
His later work points to the value of diversification. In 2000, he established Mina Property Group to focus on commercial property acquisitions, broadening interests that had been rooted in dealership operations and business development. An investor who understands more than one sector can often judge risk better, since they can compare how different businesses react when conditions tighten.
Discipline Matters More When Money Costs More
Higher rates shrink the margin for error, so the quality of each decision counts for more. That goes for the people on an investment team as much as for the figures in a spreadsheet.
Howard has long cautioned first-time managers against dominating conversations in an effort to prove themselves. As he sees it, leadership depends on listening and on understanding team dynamics. In property deals, that habit has practical value. The lender, the broker, the property manager, and the tenants each notice risks the others can miss, and a leader who listens before deciding is more likely to catch a problem while it can still be fixed.
He has also stressed that credibility comes from practicing what leaders preach, with authenticity and consistent behavior earning trust and respect over time. Borrowers and lenders work the same way. An investor who supplies accurate information, keeps commitments, and speaks up early when something changes is in a better spot when the time comes to ask for an extension, renegotiate terms, or go after the next acquisition.
Practical Steps for Property Buyers Today
For anyone weighing a commercial purchase now, a few principles hold up well. Start by testing the deal at a higher rate than the one being offered. A property that only works with ideal financing may not really work.
Pay attention to how stable the income is, including the strength of the tenants and the length of their leases, because steady rent is what carries a loan through hard stretches. Set aside reserves for vacancies, repairs, and payment increases. Get to know lenders before you need them, since a lender who’s familiar with a borrower’s track record is usually easier to work with.
Be willing to wait, too. Walking away from a deal that doesn’t fit often turns out better than closing one that strains the investor for years.
The Long View
Rising lending rates haven’t changed what makes a good property deal, though they’ve made those fundamentals harder to overlook. Income has to cover debt, the structure has to suit the buyer’s circumstances, and relationships with lenders and partners depend on credibility.
Howard Wilner’s career, which moved from dealership operations into commercial property, follows the same principles of deliberate strategy, close attention to how customers are financed, and leadership built on listening and consistency.
Howard Wilner is an automotive executive and entrepreneur who founded Automax Preowned in 1990 and established Mina Property Group, a commercial property acquisition company, in 2000. He also served as president of Marlboro Auto Exchange. He is a member of Rotary International, the Boston College Club, and NHREIA.
