Commercial Real Estate News: June 2024

Terrydale Capital

Jun 25, 2024 4 Min read

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The commercial real estate market is an ever evolving landscape with developments coming in daily. In this digest, we will break down some notable updates over the past month and some insights into what can be coming up in the near future. 

US Market and Lending Developments

Market Developments

  • Bank and CU waves: Banks have quietly begun dumping real estate loans in the fears of stacking up losses. Many experts are pointing to a dark cloud looming over bank lenders. On the other end, credit unions have shown an overall slowing of lending. 
  • Rise of Retail: Multi-tenant retail and credit tenant based assets are seen as “easy” to lend on in the current market climate by a variety of lenders.
  • Property Valuation: With a variety of factors including costs, taxes, insurance and less reliable tenancy bases, commercial real estate property valuations have taken a tumble. 
  • Appraisers are Your Friend: Appraisers, now more than ever, are playing a critical role for setting property valuations in the preparation for a refinance or sale. 
  • Better Outlooks: CBRE economist states that despite current outlooks, commercial real estate is heading for a softer landing
  • Office’s Continued Turmoil: The office sector struggles as property owners struggle with their current debt obligations. 
  • Looming Maturities: Out of the $2.2 Trillion in commercial loan coming due in 2028, nearly $1 Trillion is expected to mature this year alone. 
  • CRE Sales Trends: Last month, national PSF prices grew by 3.76% while cap rates were compressed by 6.6%.
  • Debt Rises: Commercial mortgage debt rose to $4.7 trillion in Q1 2024.

Current Lending Rates

  • Banks / Credit Unions: 6.00% - 13.00%
  • Debt Fund / Bridge: 6.90% - 12.50%
  • Agency: 5.80% - 8.00%
  • Private Money / Hard Money: 7.00% - 15.00%
  • CMBS: 6.50% - 10.95%
  • LifeCo: 6.00% - 9.00%
  • SBA: 6.80% - 10.00%

In Conclusion

As always, this is a scratch on the surface of the constantly shifting sands in the commercial real estate industry. Savvy investors should keep their eyes closely fixated on the market in order to take advantage of opportunities that may arrive at a moment's notice. Terrydale Capital constantly remains abreast of the changes in the market in order to best capitalize on opportunities as they present themselves. With over 1,800 of the nation’s top lending institutions and extensive market expertise, our team is always ready to help our clients achieve success in their commercial real estate investing journey. When you need the right team behind you, contact us today

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