Commercial Real Estate Market Update | January 2023

Terrydale Capital is actively providing capital solutions to our clients. We are constantly in discussion with our capital market resources and identifying new resources that have become more active in this new environment.

A quick snapshot of what we are seeing:

Private Money: Rate Range of 9.75%-14%

With the stock market in constant flux, more and more people are turning to Private Money Loans as a way of hedging against risk. Short-term options make these loans an increasingly attractive option for those with financial growth ambitions.

Debt Funds & Bridge Lenders: Rate Range of 7.50% – 10%

With their ease of use and attractive rates, debt funds are quickly becoming investors’ go-to. These instruments offer a great way to push leverage while maximizing return on investment, especially when used in properties with potential for value addition like buildings or land; this complements other sources of financing while investing capital simultaneously.

CMBS: Rate Range of 6%-7.50%

CMBS loan activity is expected to remain stagnant until rates normalize.

Commercial Banks: Rate Range of 5.75%-8%

Traditional banks are rapidly adjusting their lending guidelines to accommodate a volatile market. Many projects remain active, with the main focus on development, refinance, and rehabilitation opportunities. Lenders have enforced more stringent underwriting standards to ensure stability in this environment, favoring existing clients over new customers when assessing potential investments.

Credit Unions:  Rate Range of 5.50% – 8.00%

Credit Unions typically offer lower rates but are far more aggressive when it comes to leverage. However, they do full global underwriting so expect a longer closing timeline in today’s market.

Fannie & Freddie: Rate Range of 5.50% – 7.50%

Despite the tumultuous markets, Fannie & Freddie’s transactions are still keeping busy. We anticipate a large-scale return to agency options within the next quarter as investors adjust their strategies accordingly.

FHA: Rate Range of 5.20% -6.50%

With FHA interest rates on the rise in commercial real estate, borrowers looking to transition from construction and bridge loans can seize a unique opportunity. This is great news for those who are seeking financial stability!

Life Company: Rate Range of 5.50% and Up 

Actively lending on all asset classes. Call us to learn more.

Mezz/JV/Equity:

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.

*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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