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The Federal Reserve issued its third rate cut of 2025 this week, lowering the benchmark federal funds rate by 25 basis points to a target range of 3.5%–3.75%. While the move was widely expected, it still marks an important shift in the monetary landscape—one that will influence capital markets, development activity, and investor sentiment heading into 2026.

At the post-meeting press conference, Chair Jerome Powell noted that policymakers now feel “well positioned to wait and see how the economy evolves,” signaling a more measured, data-dependent approach for the months ahead.

So what does this latest cut mean for the real estate sector—and specifically the commercial environment that LPA serves?

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What Lower Rates Mean Right Now

A reduction in the federal funds rate generally filters through the economy by lowering the cost of borrowing. That can take a few different forms:

• Cheaper construction and development financing
  Lower short-term rates ease costs for construction loans, bridge financing, and value-add projects—segments that have been under pressure since 2022.

• More favorable terms for floating-rate borrowers
  Property owners with variable-rate debt, including certain commercial loans and HELOCs, may see relief as lenders adjust pricing downward.

• Potentially improved liquidity in the investment market
  Cap rate pressure may ease slightly, and buyers sidelined by expensive debt could begin re-engaging.

That said, mortgage rates—both residential and commercial—don’t move in lockstep with the Fed. Many lenders are still pricing in economic uncertainty and elevated credit risk, meaning the real estate response is likely to be gradual, not sudden.

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A Residential Market That’s Stabilizing, Not Surging

Housing has been in a holding pattern for the better part of a year. Nationally, home sales, new listings, and pricing have mostly flattened, with Fall 2025 numbers showing little movement from a month or even a year earlier.

A few notable patterns have emerged:

• Buyers have slightly more negotiating power.
  The typical home sold for about 1.5% below list price in October 2025, the widest discount since 2019.

• Supply and demand vary widely by market.
  In cities like San Francisco, supply has tightened while demand has picked up—an early signal that local dynamics will shape recovery paths.

• Overall volatility is calming.
  After five years of rapid swings, the residential sector appears to be leveling off rather than preparing for another sharp upcycle.

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Commercial Real Estate Lens: What the Rate Cut Signals

For the commercial sector, the implications are more nuanced. Even with this rate cut, capital remains more expensive than it was during the pre-2022 cycle. However, several trends are emerging:

1. Improved Feasibility for New Development

Construction starts have slowed dramatically since rates began rising in 2022. A lower cost of capital—paired with moderating materials and labor inflation—could bring select projects back into feasibility.

2. Increased Transaction Activity

Buyers and sellers have spent much of 2024 and 2025 far apart on pricing expectations. As financing becomes more accessible, price discovery should improve and deal volume may begin ticking upward.

3. Stabilization Across Asset Classes

• Industrial demand remains resilient but not explosive.

• Multifamily performance continues to depend on local oversupply trends.

• Retail is steady, bolstered by strong consumer activity in key markets.

• Office remains bifurcated, with quality and location driving outcomes.

Lower rates won’t reverse structural shifts—especially in the office sector—but they do reduce pressure on owners with near-term maturities and support refinancing opportunities that simply weren’t penciling six months ago.

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Outlook for 2026: Cautious Optimism, Not a Rapid Rebound

Looking ahead to 2026, the market points toward cautious optimism rather than a quick rebound. Capital markets are expected to loosen gradually as borrowing costs ease in small steps, with any additional Fed cuts arriving slowly under its “wait and see” approach. As financing becomes more accessible, buyer and seller expectations should begin to realign, improving underwriting conditions and opening clearer paths for acquisitions, recapitalizations, and dispositions. Growth will likely remain selective—favoring population-driven markets and sectors such as logistics, healthcare, and sunbelt metros—while investors and lenders continue to operate with discipline, supporting a steadier and more sustainable recovery compared to past cycles.

For LPA clients, this environment underscores the importance of understanding how national shifts translate into local market behavior and asset-level performance. Our team continues to provide tailored market intelligence, updated valuation insights, and strategic support for those planning their 2026 strategies—ensuring you stay well-positioned as conditions evolve.

The U.S. coworking sector continues its rapid expansion, solidifying flexible office as one of the fastest-growing asset types in commercial real estate. Between 2023 and 2025, the market grew 23%, driven by population inflows into high-growth metros, resilient job creation, and the long-term shift toward hybrid and remote work.

As companies rethink how much space they need—and what kind of space supports productivity and culture—coworking operators are stepping in to fill the gap. The result: increased absorption, diversified tenant profiles, and stable occupancy rates across many metros.

Spotlight Market: Atlanta

Atlanta is emerging as a leader in flexible office growth.

• The metro added three new coworking locations in 2025, bringing its total to 116 facilities across the region.

• With 70,000+ remote workers, the city continues to support some of the strongest hybrid adoption rates in the Southeast.

• Corporate anchors like Mercedes-Benz, PrizePicks, NCR, and a maturing fintech and entertainment ecosystem are further fueling demand for turnkey, scalable workspace options.

For operators, this creates an environment where well-located, amenity-rich spaces can outperform traditional office from both a leasing and revenue standpoint.

For investors and landlords, it represents an opportunity to reposition or diversify building income through flexible office partnerships, management agreements, or operating joint ventures.

Why Flexible Office Is Growing In CRE Strategy

1. Portfolio Agility Corporate occupiers continue to trim long-term lease liabilities in favor of shorter, more adaptable commitments. Coworking fills that need without sacrificing quality or amenities.

2. Higher Revenue Per Square Foot Top-tier coworking models often command a premium due to bundled services, conference rooms, and community programming.

3. Stabilization Through Diversification Rather than relying on a single anchor tenant, coworking spreads income across dozens—or hundreds—of small and mid-size users, creating more resilient cash flow.

4. Adaptive Reuse & Value Creation Older office assets, especially Class B, are being repositioned into shared work environments to improve occupancy and drive new traffic to mixed-use districts.

What This Means for Owners, Developers, and Investors

• Landlords: Consider flexible workspace partnerships to drive occupancy, activate ground floors, or reposition underperforming space.

• Developers: Build-in coworking or flex suites as a standard amenity to increase pre-leasing and attract modern tenants.

• Investors: The expanding operator landscape and evolving management models signal that flexible office is on track to become a standardized, investable asset category over the next decade.

• Public-sector + Economic Development Stakeholders: Coworking and flex office support entrepreneurship, talent attraction, and workforce mobility—all critical to metro-level competitiveness.

Bottom Line

Flexible office is no longer a niche trend—it’s rapidly maturing into an established and attractive asset class, reshaping how space is planned, financed, and delivered. As cities like Atlanta continue to grow, coworking will play a critical role in meeting demand with scalable, modern workspace solutions.

If you’d like support assessing how flexible office trends may impact the value, highest and best use, or income potential of your assets, our appraisal team can provide detailed market analyses and valuation-driven insights to guide your next steps.

When a property is needed for a public project, a pipeline, a roadway, or a utility expansion, landowners often hear the term “fair market value.” But what does that really mean? And how can you tell if a property appraisal is truly fair?

At LPA, we help both landowners and public agencies understand the process so everyone knows they are being treated fairly. Here’s a simple breakdown.

Understanding “Fair Market Value”

Fair market value (FMV) is the price a willing buyer would pay a willing seller, both acting reasonably and without pressure. For public projects, FMV is what the property is worth today, based on its highest and best use.

Factors that influence FMV include:

• Recent sales of similar properties nearby

• The property’s size, shape, and condition

• Zoning and land use restrictions

• Location and accessibility

• Any existing improvements, like buildings or utilities

A fair appraisal reflects these factors honestly, without overestimating or underestimating the value.

How Appraisers Ensure Fairness

Professional appraisers follow strict standards and use multiple approaches to determine value:

1. Sales Comparison Approach – Compares your property to similar properties recently sold in the area.

2. Cost Approach – Considers how much it would cost to replace any structures on the property, minus depreciation.

3. Income Approach – Looks at the property’s potential to generate income, which is more common for commercial or rental properties.

A fair appraisal usually considers all relevant approaches, not just one, and explains the reasoning clearly.

What Landowners Can Do

If you receive an appraisal for your property, you can take steps to ensure it’s fair:

• Review the Report Carefully – Check the comparisons and assumptions.

• Ask Questions – If something doesn’t make sense, ask the appraiser to clarify.

• Get a Second Opinion – You can hire your own appraiser to review the property’s value.

• Understand Your Rights – In eminent domain or ROW acquisitions, you are entitled to just compensation.

Being informed helps you negotiate confidently and ensures you’re treated fairly.

Why It Matters

A fair property appraisal protects landowners, ensures projects stay on budget, and prevents legal disputes. It’s not just a number—it’s a key step in balancing public needs with private property rights.

At LPA, we provide expert guidance in right-of-way, appraisal, and land acquisition matters. Our goal is to make sure appraisals are accurate, transparent, and fair for everyone involved.

Commentary from Mario Caro, MAI, AI-GRS, SR/WA

Right of Way Practice Leader, Lowery Property Advisors

“Have you ever taken the time to read your vesting deed or title commitment? You might be surprised by the language that shapes your property rights—or the rights an easement holder has across your land. As an appraiser evaluating easement acquisitions, it’s essential to understand the exact rights being conveyed or encumbered. Cover yourself: always ask for the easement document. And if you don’t understand it, talk to someone who does.”

Mario’s insights highlight just how critical these documents are. With that in mind, let’s look closer at how easements directly shape valuation.

How Easements Really Affect Value

Easements are one of the most overlooked drivers of market value in Texas real estate. Whether access is restricted, construction is limited, or another party holds superior rights, even a single sentence in an easement document can shift a valuation significantly.

The recent Keenan v. Robin case discussed here serves as a reminder that what looks like a “simple dirt road” through a ranch may actually be a dedicated public right-of-way—and therefore free from obstruction. In contrast, cases involving private easements show that locked gates or limited access may be permissible depending on the document language, property use, and burden on the servient estate.

From a valuation standpoint, these distinctions matter because they directly influence:

• Highest and best use

• Functional access

• Marketability and buyer perception

• Development feasibility

• Potential damages in partial takings

• Comparable sale selection and adjustment support

In other words: the legal characterization of the easement sets the foundation for the appraisal analysis.

The Title Commitment: Your First—and Most Important—Valuation Document

For appraisers, the title commitment is not just a checklist item. It is a valuation roadmap.

A carefully reviewed title commitment reveals:

1. Existing easements that may restrict buildable area or access

These encumbrances can depress land value, limit improvements, or create severance damages in right-of-way cases.

2. Encroachments or restrictions that reduce utility

Anything that restricts where improvements can be placed—or how they can be used—feeds directly into market value impacts.

3. Competing or superior rights

If a pipeline company, utility provider, or private party holds superior rights, the subject’s bundle of rights may already be diminished before any new acquisition occurs.

4. Prior dedications or plat notations

As the Keenan case illustrated, the presence of a public dedication transforms valuation because the owner cannot obstruct or control the corridor.

5. Recorded documents that appraisers must interpret

The title commitment references the documents; the documents define the rights. And those rights define the value.

For LPA’s appraisers, these details often make the difference between a routine partial acquisition and a complex severance damages analysis.

Why Reviewing Title Early Leads to Better Valuations

Many owners assume a title commitment can only be requested once a property is under contract. However, title companies can on request provide a preliminary commitment earlier, especially when:

• An agency anticipates a right-of-way project

• A landowner wants clarity before negotiations

• A developer needs feasibility insights

• A client wants to understand existing encumbrances before investing in due diligence

Getting the title commitment early helps ensure:

• Accurate scope of work

• Proper identification of affected property rights

• Correct easement area mapping

• Fewer valuation surprises

• More defensible conclusions

For public agencies and private landowners alike, this leads to clearer communication, smoother negotiations, and more reliable appraisal outcomes.

Putting It All Together: Why Easement Language Drives Value

A valuation is only as good as the understanding of:

• What rights exist

• What rights are being taken

• How those rights interact

• How the market responds to them

From access restrictions to prior dedications, easements can elevate value, suppress value, or create complex damages scenarios that require specialized analysis.

This is where LPA’s expertise matters.

How LPA Supports Accurate, Defensible Valuation

Lowery Property Advisors brings deep experience in analyzing the valuation impacts of existing easements, proposed acquisitions, and corridor-related takings. Our team interprets easement language, analyzes access implications, and delivers valuation conclusions that hold up under scrutiny.

Whether you’re preparing for a project, evaluating potential impacts, or navigating a right-of-way acquisition, our team ensures you understand not just the easement—but its influence on market value.

As the year winds down, property owners across the country are already preparing for the upcoming property tax season. For many, property taxes make up a substantial portion of their annual budget—so ensuring your assessment is accurate is essential. Late November is the ideal time to begin reviewing your valuations, gathering documentation, and identifying any issues before deadlines tighten.

Why Early Preparation Matters

Property tax assessments don’t always reflect the current market. Shifts in cap rates, rising insurance costs, vacancy changes, and market corrections throughout 2025 may not be properly captured in next year’s valuations. Addressing inaccuracies early helps prevent surprises—and gives you enough time to challenge an overassessment if needed.

Starting now means you can:

• Get ahead of county and state appeal deadlines

• Identify errors or inconsistencies in your assessed value

• Gather the documentation needed to support a reduction

• Avoid rushed decisions during the busy start-of-year period

Common Issues We See During Tax Season

Each year, we encounter recurring problems that lead owners to overpay on property taxes:

• Assessments that fail to reflect market softening in specific asset classes

• Inaccurate income or expense assumptions used by taxing authorities

• Outdated physical condition information

• Mass appraisal models that overlook unique property factors

These issues often cause assessments to be higher than they should be—which means higher tax bills for owners.

How LPA Helps Protect Your Bottom Line

Clients rely on Lowery Property Advisors to ensure taxing authorities maintain accurate assessments for their commercial real estate investments and that they aren’t paying more than they truly owe.

At LPA, we offer comprehensive property tax consulting services, including:

• Assessment reviews and valuation analysis

• Support documentation to strengthen appeals

• Expert insights into local tax trends and methodologies

• Guidance throughout the appeal process

In many cases, our property tax consulting services provide significant savings for both business and personal budgets. That’s why we encourage owners to evaluate their assessments annually—especially in a shifting market.

Don’t Wait—Start Your Review Today

Property tax season moves quickly, and early preparation is the best way to position yourself for a fair and accurate assessment. Whether you need a full valuation review, supporting documentation for an appeal, or guidance on next steps, the LPA team is ready to help.

Contact us today to see how we can support your efforts this tax season.

When navigating the process of settling an estate or managing a trust, one of the biggest questions that arises is: What is this property actually worth?

Accurate, defensible commercial real estate valuations are essential—especially in today’s shifting market and evolving tax environment.

Since 2010, LPA (Lowery Property Advisors) has supported fiduciaries, attorneys, wealth managers, and families with clear, objective valuations for estates and trusts across the country. Our team understands the sensitivity, urgency, and technical precision these assignments require.

Below, we break down when an appraisal is needed, what the IRS looks for, and how LPA helps clients move forward with confidence.

When Is an Appraisal Needed for an Estate or Trust?

Estate and trust valuations are required—and often legally mandated—in several situations:

✔ Estate Tax & Gift Tax Reporting

When filing IRS Forms 706 (Estate Tax Return) or 709 (Gift Tax Return), the IRS requires a qualified appraisal to establish fair market value of non-cash assets, including gifted real estate. This applies to both lifetime gifts and transfers occurring upon death.

✔ Probate & Trust Administration

Executors and trustees must determine the value of commercial properties to distribute assets fairly among beneficiaries. An independent valuation helps ensure transparency and reduces the risk of disputes.

✔ Basis Step-Up Planning

After a property owner passes, beneficiaries may need an appraisal to establish a new “stepped-up” tax basis—often crucial for future sales or tax planning.

✔ Litigation, Disputes, or Contested Estates

Whether it’s a disagreement among heirs, a challenge to the valuation, or a complex multi-property portfolio, a defensible appraisal performed by an expert may be vital.

✔ Buyouts, Family Sales, or Succession Planning

For families transferring property or consolidating ownership, a valuation helps define a fair price, prevent conflicts, and create a clear path forward.

✔ Loan Collateral, Liquidity Needs, or Trust Cash Flow Management

Trusts often require updated valuations to secure financing or evaluate whether assets can support long-term obligations.

✔ Divorce Proceedings & Marital Property Division

When spouses own commercial real estate together—or when one or both spouses own a business that includes real estate assets—an appraisal is often required during divorce proceedings. Courts and attorneys rely on independent valuations to:

• Determine the equitable division of property
• Establish the value of real estate tied to a jointly owned business
• Support buyouts when one spouse intends to keep the property or business
• Provide a clear, unbiased basis for negotiations or mediation

Because emotions and financial stakes can run high, a neutral third-party appraisal helps ensure fairness and minimize disputes.

Common Questions Clients Have During the Estate & Trust Process

“Does the IRS require a specific kind of appraisal?”

Yes. The IRS requires a Qualified Appraisal performed by a Qualified Appraiser with relevant education, experience, and certifications who follows generally accepted appraisal standards, such as USPAP. LPA’s appraisers always meet or exceed these standards.

“What happens if the market is volatile?”

In fluctuating environments, a timely appraisal is even more important. Our team closely tracks market movements and provides valuations that reflect current conditions—supporting defensibility in the event of an audit.

“How fast can we get an appraisal?”

We understand these assignments often come with strict deadlines. LPA has a streamlined process and the capacity to turn around time-sensitive reports without sacrificing quality.

“What if beneficiaries or other parties disagree?”

A truly independent, third-party valuation provided by a company with integrity at its core helps reduce tension and provide clarity. Our reports are transparent, data-driven, and court-ready where needed.

How LPA Supports Estate & Trust Professionals

LPA delivers objective, defensible valuations backed by deep market expertise and professional integrity. We support fiduciaries, attorneys, CPAs, and wealth advisors with a full suite of services:

• Estate & Gift Tax Valuations (IRS Forms 706 & 709)
• Probate & Trust Administration Appraisals
• Step-Up Basis & Retrospective Valuations
• Expert Witness Testimony
• Family Sales, Buyouts & Succession Planning Valuations
• Portfolio Valuation Services for Complex Estates
• Marital Property Division

Our professionals hold leading industry designations including MAI and AI-GRS, and are licensed across the United States.

Why Clients Choose Lowery Property Advisors

At LPA, we combine advanced valuation methodologies with a practical, client-focused approach. Our estate and trust clients know they can rely on us for:

• Accurate, defensible valuations that meet IRS and regulatory requirements
• Clear communication, especially in sensitive family or fiduciary environments
• Experienced appraisers capable of handling complex or multi-property portfolios
• A deeply knowledgeable team who can explain the “why” behind every value
• Tailored guidance that supports advisors and families at every step

Whether you’re facing a filing deadline, resolving a dispute, or supporting long-term wealth planning, we provide clarity when it matters most.

Let’s Talk

LPA is uniquely positioned to support those navigating these high-stakes transitions. As an independent valuation firm, we bring precision, integrity, transparency, and confidence to every assignment.

To speak with one of our valuation specialists, please call 214.347.8558 or click the “Request an Appraisal” box at the top of this page.