CRE Financing Rates Breakdown By Property Type | August 2024
Terrydale Capital
Aug 2, 2024 7 Min read
Our competitive edge in commercial real estate comes from our ability to continuously generate quotes for various property types, giving us real-time insights into market trends. To secure the best financing for our clients, we have built a comprehensive nationwide database of financing rates across different asset classes. This up-to-date data, reflecting August 2024 market conditions, empowers you to make well-informed decisions.
Multifamily
Rate Range: 5.35% - 10.25%
Quoted Average: 6.59%
Throughout 2024, Agency options have lead market trends by offering highly competitive rates, with some beginning to dip into the lower 5's. HUD options remain robust, especially in asset refinancing. Despite oversaturation, CMBS remains a sturdy option for investors if they are able to acquire that execution. As we continue forward, investors and property owners should stay highly alert to the consistent wall of maturities and keep an eye on their own.
Industrial
Rate Range: 6.50% - 11.00%
Quoted Average: 8.00%
As we continue to quote industrial investments, we've observed a comfortable decrease in average interest rates for this asset class with new options rising to the top with competitive pricing. Notably, debt funds have gotten more and more competitive with rates regarding industrial assets.
Self-Storage
Rate Range: 6.55% - 10.00%
Quoted Average: 8.39%
Similar to industrial investments, we've observed a continued slight decrease in average interest rates across the board, primarily driven by debt funds becoming more and more competitive. We have even been quoting a multitude of favorable options for investors.
Retail
Rate Range: 6.75% - 11.25%
Quoted Average: 8.57%
Average interest rates for retail assets have remained steady, though we have seen options reaching into the 6% range. We have seen a large spike in multi-tenant and credit tenant deals as lending institutions have labeled them to be “easy to lend on” in the current market.
Land
Rate Range: 10.00% - 14.75%
Quoted Average: 12.25%
Following an established criteria over the last year, many traditional lenders continue to prefer developmental land while exercising caution with speculative projects and raw land as a whole. These stringent criteria have led to higher overall rates and a constrained pool of willing lenders.
Single Family
Rate Range: 5.00% - 12.99%
Quoted Average: 9.00%
Much like in the multifamily sector, agency loans continue to play a significant role in both individual and portfolio projects. Additionally, HUD and CMBS options consistently demonstrate strong competitiveness in this arena. However, there have been instances of higher rates as lenders contend with properties intended solely for investment purposes, striving to preserve housing availability for genuine homebuyers.
Data Center
Rate Range: 7.50% - 11.55%
Quoted Average: 9.55%
Since 2023, data centers have emerged as a burgeoning asset class, and in 2024, they are seeing a surge in investment activity. While they are a very specialized asset, we strongly advise investors seeking portfolio diversification to carefully evaluate and seize opportunities within the data center sector as they arise.
Office
Rate Range: 6.90% - 9.50%
Quoted Average: 8.29%
Despite the sluggish lending activity for office assets in 2023, there are signs of a modest resurgence in lenders offering office loans in 2024 despite its continued struggles. However, these participating lenders continue to maintain stringent underwriting requirements. Despite this, some options have risen to be rather competitive in the space.
RV Park
Rate Range: 8.00% - 9.00%
Quoted Average: 8.33%
Despite being a more niche asset class, there has been increased activity in RV Park investment over the last month. With a wide range of applicable financing routes and a relatively straightforward underwriting process, we have observed relatively steady rates compared to other assets.
Mobile Home
Rate Range: 7.40% - 10.00%
Quoted Average: 9.73%
With the growing demand for affordable housing options, many investors are redirecting their attention to mobile home parks. Mobile homes offer advantages such as lower rates and simplified underwriting processes, presenting a unique diversification opportunity for any portfolio.
Hotel
Rate Range: 8.60% - 10.00%
Quoted Average: 9.41%
Investment momentum in hotels has been on a steady rise since the year's start. We've noted a surge in market opportunities, paired with a widening array of lending options. Moreover, an increasing number of lenders are showing openness to this asset class.
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.
