Higher rates can hurt valuations, freeze sellers, and create distress. They can also create exactly the kind of buying opportunities value-add investors wait for.

In Episode 51 of The Value Builder Podcast, Saul Zenkevicius sits down with Nikita Zhitov and Rafik Moore to unpack five CRE stories that were getting major attention: AI and office demand, rising foreclosures, retail’s comeback, higher-for-longer rates, and whether industrial is actually overbuilt.

With the Fed decision landing as this episode drops, the rates discussion is especially timely. Rafik explains why “the more distress they cause, the more bullish I get,” while Saul lays out a simpler response to rate uncertainty: stop trying to predict the Fed, underwrite conservatively, and buy deeper. Nikita adds the seller-side reality: many owners still have not adjusted expectations enough for today’s cost of capital.

They also get into why Class A office may separate further from B/C, why retail demand is coming back in new forms, and why small- and mid-bay industrial may still have room even when big-box distribution feels overbuilt.

Chapters

00:15 Five CRE stories everyone is talking about 00:45 Is AI really killing the office? 07:38 Why Class A office may separate from B/C 11:18 Foreclosures up 21%: crack or normalization? 15:30 Why interest rates are driving distress 19:37 Why retail is back 24:45 Experiential retail and value-add opportunity 28:18 Higher rates, deeper discounts 30:56 Stop predicting the Fed. Underwrite for it. 32:50 Is industrial really overbuilt? 36:04 Why small- and mid-bay still look interesting 38:05 Final thoughts on surviving the cycle

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