Commercial Real Estate Financing State of the Market | July 2023
Terrydale Capital
Jul 6, 2023 7 Min read
Terrydale Capital is dedicated to providing our clients with a comprehensive selection of capital solutions. We deeply value staying up-to-date with the ever-evolving market trends through consistent communication with our capital market resources. Additionally, we proactively explore emerging sources that have gained significant traction. To keep you informed, we encourage you to review our latest financing update. This update offers a concise overview of the current market conditions and sheds light on how we leverage these conditions to create valuable opportunities for our esteemed clients.
Private Money: Rate Range of 11%-14%
In an era of ongoing financial market unpredictability, an increasing number of individuals are seeking alternative investment options. Private money loans have emerged as an attractive choice for those aiming to mitigate risk and achieve financial growth, thanks to their inherent advantages and short-term flexibility.
Debt Funds & Bridge Lenders: Rate Range of 9.00% – 11.00%
In an era characterized by continuous financial market unpredictability, more and more individuals are actively exploring alternative investment options. Among these options, private money loans have gained significant popularity. They are considered an appealing choice for individuals seeking to mitigate risk and attain financial growth, owing to their inherent advantages and short-term flexibility.
CMBS: Rate Range of 6.00%-7.00%
Amidst the temporary slowdown, industry experts maintain an optimistic outlook regarding a potential market rebound, especially as interest rates stabilize. There is anticipation that the CMBS loan market, despite its current state, will regain momentum in the future. This positive sentiment stems from the expectation that rates will eventually stabilize, leading to a revitalized activity within the CMBS lending sector.
Commercial Banks: Rate Range of 6.00%-9.00%
In response to the unpredictable market conditions, traditional banks are proactively adjusting their lending practices to stay competitive. While certain projects are still progressing, there is a notable shift towards focusing on development, refinancing, and rehabilitation endeavors. In order to ensure stability, banks are implementing more strict underwriting processes, which might prioritize established clients over new ones when assessing potential investments. However, we have experienced a slight drop in interest rates compared to recent months.
Credit Unions: Rate Range of 6.00% – 8.00%
Credit unions stand out among other lenders by offering borrowers the advantage of lower interest rates, making them an appealing choice. However, it is important to consider that credit unions often follow a more meticulous lending approach. This means they may have an extensive underwriting process in place, leading to longer closing times, particularly given the current market conditions. While credit unions provide competitive rates, borrowers should anticipate potential delays in loan approval and closing due to the thoroughness of their underwriting procedures.
Fannie & Freddie: Rate Range of 5.50% – 6.50%
Despite the persistent market turmoil, transactions involving Fannie Mae and Freddie Mac continue to display strength. We view these transactions as some of the most favorable options available for residential and multifamily properties. Many buyers are opting for lower leverage and providing additional equity to secure more favorable interest rates. This strategy allows them to take advantage of the current market conditions and lock in better financing terms.
FHA: Rate Range of 5.30% -5.60%
The trend of interest rates related to FHA loans in commercial real estate offers borrowers an opportunity to transition seamlessly from construction and bridge loans. This transition can be highly beneficial, especially for those seeking financial stability. By capitalizing on FHA loans during a period of rising interest rates, borrowers can secure long-term financing options that provide greater stability and potentially lower overall costs. This allows borrowers to move from temporary financing arrangements, such as construction or bridge loans, to more permanent and advantageous FHA loan terms.
Life Company: Rate Range of 6.00%-7.00%
Actively lending on all asset classes. Call us to learn more.
In today’s market, there are many options available for structuring deals, and Mezzanine and Equity financing enable our clients to pursue larger projects. Experienced and qualified investors may even be able to secure a deal with as little as a 5% down payment.
To stay up-to-date with real-time market rates, check out Terrydale Live. Access live market rates, active opportunities on the market and even perform your entire financing request online with the click of a button.
*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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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.
