Interest rates get most of the attention when a commercial real estate transaction no longer pencils. Sometimes, however, the problem is hiding farther down the operating statement.
For commercial mortgage professionals, property insurance was once treated largely as a necessary operating expense and closing requirement. Today, its cost, availability, deductibles and exclusions can influence net operating income (NOI), debt-service coverage ratios (DSCRs), liquidity requirements and ultimately whether a transaction works at all.
Insurance, in practical terms, has become part of the credit box.
The problem is particularly visible in multifamily housing. A 2025 Federal Reserve Bank of Minneapolis survey of multifamily owners in four Upper Mid...
