Prolonged high interest rates and shifting lender appetites are creating acute refinancing challenges for commercial property stakeholders. Borrowers trapped on expensive stopgap facilities or facing lower loan-to-value ratio (LVR) assessments must manage mounting holding costs. When refinancing is no longer viable, understanding how to implement a recovery-led sale strategy is critical to protecting value and avoiding formal enforcement.
The cost of carrying commercial debt has risen significantly, particularly for complex scenarios. As of 2026, indicative commercial loan interest rates in Australia range from 6.05 per cent to 14 per cent, with private and specialist facilities for urgent or complex situations priced between 10 per cent and over 14 per cent. Simultaneously, tighter risk appetites mean properties requiring higher LVRs often face premium pricing and non-bank-only requirements.
For advisers, lenders and owners, expensive private loan facilities rapidly erode remaining equity. Prolonged delays in restructuring an underperforming position often lead to forced action, which can damage buyer confidence and asset value. Recognising when holding costs outweigh the long-term benefit of retaining the asset is essential. A proactive approach allows stakeholders to control the divestment process, ensuring transparency and preserving capital before an external appointment becomes unavoidable.
A managed, recovery-led sale provides a structured pathway to resolve debt while mitigating risk. Unlike a distressed approach, this strategy focuses on asset readiness and sustaining buyer confidence.
Stakeholders must assess the true cost of alternative private finance against the realistic timeline for an asset turnaround. Capitalising high interest rates quickly consumes equity, leaving little margin for error if market conditions shift.
Engaging specialist commercial property advice early ensures the asset is positioned effectively. Addressing leasing gaps, resolving compliance issues or preparing clear vendor reporting can significantly improve market reception, driving competitive tension rather than signaling distress to opportunistic buyers.
When commercial refinancing becomes unviable due to high specialist rates and lower LVRs, stakeholders must act decisively. A well-managed, recovery-led sale mitigates compounding holding costs, sustains buyer confidence and actively protects the remaining equity before external intervention becomes necessary.
If you would like to understand how this insight may affect your asset performance or discuss your property strategy, contact the RWC (SC) Team for a confidential asset review.
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