CRE Financing Rates Breakdown By Property Type | June 2024

Terrydale Capital

Jun 3, 2024 6 Min read

blog image Market Updates

We stay ahead of the curve in commercial real estate by constantly generating quotes for different property types. This gives us real-time insights into market trends. To ensure our clients get the best financing, we've compiled a nationwide database of financing rates for various asset classes. This data reflects May 2024 market conditions and helps you make informed decisions.

Multifamily

Rate Range: 5.80% - 11.00%

Quoted Average: 8.21%

As we move further into 2024, agency options continue to lead market trends by offering highly competitive rates, with some dipping below 6%. HUD options remain robust, especially in asset refinancing. Moreover, there is a significant rise in competitive CMBS options. The market is also seeing an increase in distressed multifamily properties, creating numerous opportunities for potential investors. Additionally, investors and property owners should stay alert to the consistent wall of maturities.

Industrial

Rate Range: 7.30% - 11.00%

Quoted Average: 8.52%

As we continue to quote industrial investments, we've observed a slight decrease in average interest rates for this asset class. Notably, credit unions and banks within this market segment consistently offer highly competitive rates.

Self-Storage

Rate Range: 6.00% - 11.00%

Quoted Average: 8.18%

Similar to industrial investments, we've observed a continued slight decrease in average interest rates across the board, primarily driven by banks and credit unions. We have even been quoting a multitude of favorable options for investors.

Retail

Rate Range: 6.75% - 10.50%

Quoted Average: 8.13%

Average interest rates for retail assets have remained steady, though we have seen options reaching into the 6% range. By emphasizing tenant profiles and implementing localized strategies for projects, we've found that credit unions and banks offer the most competitive avenues for retail ventures.

Land

Rate Range: 10.00% - 13.75%

Quoted Average: 12.42%

Following an established criteria over the last year, many traditional lenders continue to prefer developmental land while exercising caution with speculative projects. These stringent criteria have led to higher overall rates and a constrained pool of willing lenders.

Single Family 

Rate Range: 6.96% - 15.00%

Quoted Average: 11.20%

Much like the multifamily sector, agency loans remain prominent players in both individual and portfolio projects. Additionally, HUD and CMBS options consistently demonstrate significant competitiveness in this arena. However, there have been instances of higher rates as lenders contend with properties intended strictly for investment purposes, striving to preserve housing availability for genuine homebuyers.

Data Center

Rate Range: 7.55% - 11.55%

Quoted Average: 9.55%

Since 2023, data centers have emerged as a burgeoning asset class, and in 2024, they are seeing a surge in investment activity. While they are a very specialized asset, we strongly advise investors seeking portfolio diversification to carefully evaluate and seize opportunities within the data center sector as they arise.

Office

Rate Range: 8.27% - 9.50%

Quoted Average: 8.76%

Despite the sluggish lending activity for office assets in 2023, there are signs of a modest resurgence in lenders offering office loans. However, these participating lenders continue to maintain stringent underwriting requirements.

RV Park

Rate Range: 8.25% - 9.00%

Quoted Average: 8.33%

Despite being a more niche asset class, there has been increased activity in RV Park investment over the last month. With a wide range of applicable financing routes and a relatively straightforward underwriting process, we have observed relatively steady rates compared to other assets. 

Mobile Home

Rate Range: 7.40% - 9.25%

Quoted Average: 8.33%

With the growing demand for affordable housing options, many investors are redirecting their attention to mobile home parks. Mobile homes offer advantages such as lower rates and simplified underwriting processes, presenting a unique diversification opportunity for any portfolio.

Hotel

Rate Range: 9.00% - 10.50%

Quoted Average: 9.55%

Investment momentum in hotels has been on a steady rise since the year's start. We've noted a surge in market opportunities, paired with a widening array of lending options. Moreover, an increasing number of lenders are showing openness to this asset class.

Partner With Terrydale Capital for Your Debt Financing Needs

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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