Foreclosures, interest rates, investments ready to unleash

Just one year ago, I expressed concerns that a wave of commercial foreclosures was rising and Hardin County wouldn't be immune to its effects. Published in September 2024, it came at a moment of deep national uncertainty. Inflation had cooled but interest rates remained stubbornly high and a contentious presidential election was in the homestretch.

Today, we find ourselves at a pivotal turning point.

As of mid-September 2025, with the presidential election now behind us and the Federal Reserve Board's 25 basis point reduction in interest rates, we may finally be entering a more favorable environment for commercial real estate investment. The road here has been anything but smooth.

Throughout late 2024 and most of 2025, the commercial real estate market remained in limbo. Despite improving fundamentals — including consumer spending, job growth in Kentucky and new development opportunities across the Interstate 65 corridor — many investors held their breath, waiting for interest rate relief.

The cost of capital remained too high for deals to pencil out, especially for smaller local investors. Across the country, Commercial Mortgage-Backed Securities loan maturities have begun to hit hard. In fact, more than $60 billion in CMBS debt is maturing nationally in 2025 and a significant portion of that already is categorized as distressed.

Locally, the strain has been felt most in sectors like outdated retail centers and aging office buildings — some of which haven't seen meaningful tenant activity in years.

According to Trepp data, the national CMBS delinquency rate jumped to 5.8% this summer, with office properties and mid-tier shopping centers leading the slide.

Hardin County's numbers are not as dire, but we're not untouched either. Regional retail centers, particularly older strip centers along Dixie Highway and outdated office spaces off Ring Road, are underperforming and nearing loan maturity with unclear refinance prospects. Macerich, former owner of Towne Mall, chose to walk away from its loan a couple years ago and local developer Tim Aulbach is redeveloping that site into City Center.

While headlines over the past year have focused on foreclosures and distressed debt, what's been quietly building behind the scenes is pent-up investor demand.

In Hardin County and across Kentucky, there is no shortage of capital waiting on the sidelines. Local developers, regional investment groups, and national funds are all eager to re-enter the market — they've just been waiting for interest rates to dip below that crucial threshold where projects begin to make sense again.

With the Federal Reserve's rate cut, we should see a renewed rush of investment activity. Expect refinancing of previously distressed assets, new construction starts, especially in fast-growing corridors near Glendale and Elizabethtown and competitive bidding for stabilized income-producing properties.

We're already seeing signs of this pent-up energy. There's growing inquiry volume on local CRE listings, increased attendance at economic development meetings, and new site due diligence underway for mixed-use projects along Patriot Parkway, Glendale and near the former Towne Mall "City Center" redevelopment zone.

If you've been waiting for the right time to invest — or re-invest — in Hardin County commercial real estate, the window is open, and the timing is right.

Here are a few areas to watch:

Value-add properties: Assets that struggled during high-rate periods now may offer significant upside with modest renovation and re-tenanting.

Owner-occupied CRE: With rates easing, small business owners may find that buying makes more financial sense than leasing.

Industrial and logistics: With BlueOval SK continuing its ramp-up, nearby industrial land and logistics centers remain in strong demand — a trend that's only expected to grow through 2026.

There's also renewed opportunity for cost segregation strategies and 1031 exchanges to regain traction. As financing costs drop, tax planning becomes a more powerful component of return-on-investment calculations.

Hardin County's fundamentals remain strong. Job growth continues, thanks in part to Fort Knox's stable presence and the transformative BlueOval SK development in Glendale. Tourism initiatives such as the Buffalo Lake outdoor music venue are bringing fresh energy to Elizabethtown. And local leaders continue to push forward on infrastructure and revitalization.

We have a lot going for us — but we must remain proactive.

Now is the time for stakeholders to look closely at their portfolios, reconsider sidelined projects, and re-engage with commercial real estate professionals to identify the right moves in this shifting landscape.

Interest rates don't just shape investor spreadsheets — they shape our communities. They determine whether that empty storefront finds a new tenant or sits vacant for another year. They influence whether our historic buildings are redeveloped or neglected.

As we enter what may finally be a more favorable rate environment, let's not waste the opportunity. Let's invest boldly, plan strategically and continue building a Hardin County that reflects both our values and our vision for the future.

If you've been sitting on the sidelines, it might be time to step back onto the field.

Jeff Farmer is a real estate consultant with eXp Commercial and Action Advisors. Opinions expressed are those of the author.