State of the Market: February 2022
Brian Gramlich- TDC Founder and CEO
As part of our efforts to provide excellent capital solutions to our clients, Terrydale Capital maintains a dialogue with an extensive network of capital market resources and identifies new ones as they arise. Each month, we condense the highlights just for you. View below to see a quick snapshot of what we’re seeing in the current environment including updates on Private Money, Debt Funds & Bridge Lenders, CMBS, Commercial Banks, and more.
Private Money: Rate Range of 5.50%-10.00%
Private Capital is still very plentiful, however, many firms had to stay on the sidelines last year on several deals due to the amount of competition in the market. With rates moving up, these firms should see an increase in production this year and we anticipate an increase in funding through private lenders this year.
Debt Funds & Bridge Lenders: Rate Range of 3.50% – 7.00%
2021 was huge for bridge lenders and debt funds. With rates increasing this year, we anticipate investors to seek extension options and take out options to lock in rates vs. stay on a floating rate. We are already seeing a big increase in refinance opportunities and expect debt funds to continue to play a major role in commercial real estate finance.
CMBS: Rate Range of 3.00%-4.50%
CMBS is offering very competitive rates and very attractive fixed term options. This year CMBS will have a strong year given the rate volatility and investors seeking non-recourse, max leverage, fixed rate options as they come out of their bridge loan acquisitions.
Commercial Banks: Rate Range of 2.50%-5.50%
2021 we originated nearly half of our business through our commercial banking relationships. Banks have been very eager to lend with higher leverage, flexible pre-pay, and extremely low rates to earn depository relationships. We don’t see this changing in 2022.
Credit Unions: Rate Range of 2.95%-5.00%
CUs are still great options for loans below $3MM traditionally and we anticipate them having a big role for opportunities in tertiary markets.
Fannie & Freddie: Rate Range of 3.25% – 4.25%
Agency financing is still very aggressive. Rates have been increasing sharply this year on these programs; however, they will also have another huge year with investors coming out of their bridge/debt fund loans to longer term fixed options.
FHA: Rate Range of 2.70% – 3.75%
FHA program we are seeing a big increase in activity here at Terrydale. For development that can afford the timeline this is the best execution for multi-family development.
Life Company: Rate Range of 2.00% and up
Actively lending on all asset classes. Call us to learn more.
Investors have many ways to structure a deal in today’s market. Mezz and Equity structures allow our clients to seek larger opportunities with options to position their transaction with as little as 5% down for qualified experienced investors.
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