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How Insurance, Interest Rates, & Taxes Are Pulling Profits Out of Florida CRE
Ask any Florida property owner what’s keeping them up at night in 2025 and you’ll hear the same trio again and again:
- Skyrocketing insurance premiums
- Persistent interest rate pressure
- Climbing property tax assessments
Together, they’ve created a perfect storm—one that’s shrinking margins and forcing tough decisions.
Breaking Down the Storm
1. Insurance: Between hurricanes, rising sea levels, and a retrenching carrier market, insurance premiums in Florida have doubled—or worse—for many properties. Though there have been some reprieves recently, the cost of insurance is nowhere near acceptable for most properties in FL. These inflated costs have led to thinner margins for owners and put an upward pressure on rents as owners do their best to maintain profitability.
2. Interest Rates: Higher borrowing costs have stalled refinancing deals and reduced leverage, impacting new acquisitions and capital stacks. The “higher for longer” mantra has really proven to be a reality in today’s world of commercial real estate. This reality has begun to set in with property owners looking to exit their positions and many are accepting this as the new normal. This will continue to impact sale prices and refinancing potential as many loans from the post-covid boom come due.
3. Taxes: As property tax valuations rise (whether justified or not), tax bills are pushing beyond what rental growth alone can cover. Even in the face of stagnant rents, increasing insurance and other operating costs, many asset valuations will increase which will cause property taxes to increase. This will cause further upward pressure on operating expenses and ultimately will impact the valuation of the property.
The Impact on Owners
This triple-threat has real consequences:
- Deferred maintenance and capex cuts
- Lease renegotiations or tenant turnover
- Stalled development pipelines
- Capital Calls and potential foreclosures
What You Can Do
While you can’t control insurance rates or the weather, you can control your property tax strategy. If the appraiser made a mistake with your property valuation, don’t just pay the tax bill and move on. Now more than ever, appealing your assessment can be the difference between staying profitable—or falling behind.
FirstPointe’s Advantage
We help you fight back on at least one front: taxes. Our deep knowledge of Florida’s appraisal trends, income models, and appeal thresholds gives you the best shot successfully appealing an elevated tax bill to provide peace of mind when everything else feels out of control.
Let us help restore a little balance to your operating budget.
Contact us for today for help on your property tax needs!
954.546.9630
6301 NW 5th Way
Suite 2800
Fort Lauderdale,
FL 33309
