Commercial Real Estate Market Update | July 2022
Brian Gramlich- TDC Founder and CEO
July 27th, 2022 · 4 min read
Terrydale Capital is actively providing capital solutions to our clients. We are in constant discussions with our capital market resources and are also 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 8%-14.00%
Private Money lenders are tightening their belts and asking for more equity. We anticipate this to continue for the next month or so as the market adjusts.
Debt Funds & Bridge Lenders: Rate Range of 4.75% – 8.99%
Many of these types of firms have also pulled back on high leverage. We are seeing a leverage dip of about 5-10% on acquisitions for all asset classes. Still, these firms have a strong appetite to lend and we believe they will make a big push in Q4 to get money out.
CMBS: Rate Range of 5.00%-6.50%
CMBS is still in the market and providing capital but pricing accordingly. We are seeing a lot of creative structures and requests to get deals done such as rate buydowns to offset short-term debt-service risk.
Commercial Banks: Rate Range of 4.50%-6.50%
Commercial Banks with strong balance sheets have a competitive edge to stay tight on pricing and provide fair and competitive terms on quality opportunities. We are still funding through traditional banks quite aggressively as they tend to blend the best of both worlds when it comes to rating, LTV, and flexibility.
Credit Unions: Rate Range of 4.75% – 6.00%
CUs are continuing to get loans done in markets where many other conventional lenders have trouble.
Fannie & Freddie: Rate Range of 4.50% – 5.45%
We are starting to see investors choose this execution as commercial banks have raised rates and adjusted leverage, whereas Agency now is looking more attractive. We anticipate pricing to continue to adjust in the next quarter which will move investors looking at conventional transactions to move back to agency executions.
FHA: Rate Range of 3.70% -4.50%
For developers that can afford the timeline, this is the best execution for Multi-Family development. We are seeing clients take this option for newly stabilized properties as well. Most are refinance situations.
Life Company: Rate Range of 4.00% and Up
Actively lending on all asset classes. Contact 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.
*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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