Two Pennsylvania Appraisers Published in NAR Create Magazine

Pennsylvania appraisers Mike Rohm and Brendan Wewer were published in the National Association of Realtors® Create Magazine, Summer Edition. The two authored an article called “Under the Radar: Combatting NOI Erosion Amid Rising Expense,” which discussed the effects of rising operating expenses and shifting tenant demand on lease structures and the preservation of NOI and property value. 

“Our article highlights what we see as the biggest threat to real estate values: operating costs such as taxes, insurance, utilities, maintenance and labor rising faster than rent growth,” says Rohm, managing director of Commonwealth Commercial Appraisal Group.  

“This trend places downward pressure on property values, challenges the assumption that prices inherently appreciate and has contributed to low confidence and fewer transactions. The article aims to provide perspectives and actionable steps to help clients navigate this issue and protect long-term value.”  

For commercial real estate professionals in Pennsylvania, Rohm offers this takeaway: 

“Challenge the assumption that real estate prices inherently appreciate,” he says. “Without closely monitoring and advising owners how to preserve NOI given the inflationary environment of expenses, leverage may shift to tenants and may be impossible to regain. Discuss how to incorporate expense sharing responsibilities into leases where it may not currently be the market standard.”  

Read their full article here.