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Waiting is no longer a viable commercial real estate investment strategy. After spending much of the past several years hoping lower interest rates would revive transaction activity and restore the economics that supported the previous cycle, investors are increasingly building their business plans around a less forgiving premise: Expensive capital may be here to stay, so they need to find ways to operate under current financing conditions.

After rapidly raising its benchmark rate between 2022 and 2023—from the 0.25 to 0.5 percent range to the 5.25 to 5.5 percent range, the highest it’s been since 2001—the Federal Reserve has made several cuts, bringing the rate to the 3.5 to 3.75 percent range today. Investors had anticipated another two, possibly three, rate cuts this year, but stubborn inflation has diminished the likelihood of near-term relief and kept another increase within the realm of possibility.