Commercial Real Estate Financing State of the Market | August 2023
Terrydale Capital
Aug 1, 2023 7 Min read
Terrydale Capital is dedicated to providing our clients with a comprehensive selection of capital solutions. We deeply value staying up-to-date with the ever-evolving market trends through consistent communication with our capital market resources. Additionally, we proactively explore emerging sources that have gained significant traction. To keep you informed, especially in the ever changing market, we have compiled a digest of various financing rates from across the nation.
Private Money: Rate Range of 10%-14%
Amidst the continuous unpredictability of the financial markets, a growing number of individuals are turning to alternative investment options. Private money loans have garnered significant appeal as an attractive choice for those seeking to mitigate risks and achieve financial growth. Their inherent advantages and short-term flexibility make them a compelling option in today's landscape.
Debt Funds & Bridge Lenders: Rate Range of 8.00% – 12.00%
During an era marked by ongoing financial market unpredictability, an increasing number of individuals are proactively exploring alternative investment options. Among these choices, private money loans have experienced substantial popularity. These loans are considered particularly attractive to individuals aiming to minimize risk and achieve financial growth due to their inherent advantages and short-term flexibility.
CMBS: Rate Range of 6.50%-7.50%
There is a prevailing anticipation that the CMBS loan market, despite its current condition, will continue regaining momentum in the future. This positive sentiment is rooted in the expectation that rates will eventually stabilize, resulting in a revitalized activity within the CMBS lending sector.
Commercial Banks: Rate Range of 6.50%-9.50%
To adapt to the unpredictable market conditions, traditional banks are taking proactive measures to adjust their lending practices and maintain competitiveness. Although some projects are still moving forward, there is a noticeable shift towards prioritizing development, refinancing, and rehabilitation endeavors. To ensure stability in their portfolios, banks are continuing to implement stricter underwriting processes, with a potential emphasis on established clients over new ones when evaluating potential investments.
Credit Unions: Rate Range of 6.50% – 8.50%
Credit unions stand out among other lenders by offering borrowers an advantage of lower interest rates, making them an appealing choice. However, it is important to consider that credit unions often follow a more meticulous lending approach. This means they may have an extensive underwriting process in place, leading to longer closing times, particularly given the current market conditions. While credit unions provide competitive rates, borrowers should anticipate potential delays in loan approval and closing due to the thoroughness of their underwriting procedures.
Fannie & Freddie: Rate Range of 5.50% – 6.50%
Despite the ongoing market turmoil, transactions involving Fannie Mae and Freddie Mac remain resilient, demonstrating their strength. We consider these transactions to be among the most favorable choices for residential and multifamily properties. Numerous buyers are now choosing lower leverage and offering additional equity to secure more favorable interest rates. By adopting this strategy, they can capitalize on the current market conditions and secure better financing terms for their investments.
FHA: Rate Range of 5.75% -7.50%
The current trend of interest rates associated with FHA loans in commercial real estate presents borrowers with a valuable opportunity to transition smoothly from construction and bridge loans. This transition can be particularly advantageous, especially for those seeking financial stability. By taking advantage of FHA loans amidst a period of rising interest rates, borrowers can secure long-term financing options that offer greater stability and potentially lower overall costs.
Life Company: Rate Range of 6.00%-7.00%
Actively lending on all asset classes. Call us to learn more.
In today’s market, there are many options available for structuring deals, and Mezzanine and Equity financing enable our clients to pursue larger projects. Experienced and qualified investors may even be able to secure a deal with as little as a 5% down payment.
To stay up-to-date with real-time market rates, check out Terrydale Live. Access live market rates, active opportunities on the market and even perform your entire financing request online with the click of a button.
*Rates are estimates and based on the assumption of Max LTV. Lower LTV options would allow for lower rate options in the market
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
