Commercial Real Estate Financing State of the Market | February 2023
Brian Gramlich- TDC Founder and CEO
February 9th, 2022 · 4 min read
At Terrydale Capital, we are dedicated to delivering multiple capital solutions to our clients. We stay on top of the market by continuously engaging with our capital market resources and seeking out new sources that have become more active in the current environment. Stay updated with our latest financing update for a quick overview of what’s happening in the market and how we’re making the most of it.
Private Money: Rate Range of 9.75%-14%
In the face of a volatile stock market, individuals are increasingly seeking alternative forms of investment. With their short-term flexibility, Private Money Loans offer a valuable option for those seeking to hedge against risk and pursue financial growth.
Debt Funds & Bridge Lenders: Rate Range of 7.50% – 10%
As their ease and competitive rates make them a popular choice, debt funds are quickly becoming a go-to investment for many. By combining leverage with a high return on investment, they provide a great opportunity, particularly when investing in properties with the potential for added value like buildings or land.
CMBS: Rate Range of 6%-7.50%
Despite a slowdown in CMBS loan activity, the market is expected to recover once interest rates stabilize.
Commercial Banks: Rate Range of 5.75%-8%
In light of the fluctuating market, traditional banks are adapting their lending practices to stay competitive. While many projects are still underway, a greater focus has been placed on development, refinancing, and rehabilitation. In an effort to maintain stability, banks have become more selective in their underwriting and may favor established clients over new prospects when considering potential investments.
Credit Unions: Rate Range of 5.50% – 8.00%
Though credit unions tend to offer lower rates, they also employ a more aggressive lending approach. Keep in mind that, due to their comprehensive global underwriting process, closing times may be longer in today’s market.
Fannie & Freddie: Rate Range of 4.99% – 6.50%
Despite market turmoil, transactions through Fannie & Freddie continue to thrive. We anticipate a resurgence of interest in agency options in the near future as investors reassess their strategies.
FHA: Rate Range of 3.50% -5.50%
With rising FHA interest rates in the commercial real estate sector, borrowers have a prime opportunity to transition from construction and bridge loans to achieve greater financial stability.
Life Company: Rate Range of 5.50% and Up
Actively lending on all asset classes. Call us to learn more.
With numerous options for structuring a deal in today’s market, Mezz and Equity options offer our clients the chance to pursue larger opportunities. Qualified and experienced investors may even be able to secure a deal with as little as 5% down..
*Rates are estimates and based on the assumption of Max LTV. Lower LTV options would allow for lower rate options in the market
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