Commercial Real Estate Financing State of the Market | March 2023

Terrydale Capital is committed to providing our clients with a variety of capital solutions. We stay current with commercial interest rates in the market by continually engaging with our capital market resources and exploring new sources that have become more active in the current environment. Stay informed with our latest financing update delivering a brief overview of the market’s current state and how we are capitalizing on it. 

Private Money: Rate Range of 8.5%-12%

As financial markets remain unpredictable, more and more people are turning to alternative investment options. Private money loans, with their ability to provide short-term flexibility, present a valuable opportunity for individuals who want to mitigate risk and achieve financial growth.

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

Due to their convenience and competitive interest rates, debt funds are becoming a popular investment choice among many investors. These funds offer a great opportunity for leveraging and generating high returns, especially when investing in properties with potential for added value such as buildings or land. 

CMBS: Rate Range of 6%-7.50%

While CMBS loan activity has slowed down, experts predict a rebound in the market as rates stabilize.

Commercial Banks: Rate Range of 6.00%-8.75%

To remain competitive amidst the volatile market, traditional banks are adapting their lending practices. While some projects are still in progress, the focus has shifted towards development, refinancing and rehabilitation. To maintain stability, banks are being more selective in their underwriting and may give priority to established clients over new ones when considering potential investments.

Credit Unions:  Rate Range of 6.00% – 8.75%

Credit unions typically offer lower rates, but they also employ a more aggressive lending approach. It is important to note that their comprehensive global underwriting process may result in longer closing times in the current market.

Fannie & Freddie: Rate Range of 5.40% – 6.25%

Despite the ongoing market turmoil, transactions through Fannie Mae and Freddie Mac continue to thrive. We expect a continued interest in agency options in the future as investors reassess their strategies. 

FHA: Rate Range of 4.50% -6.00%

The increasing interest rates of FHA loans in commercial real estate, present an opportunity for borrowers to smoothly transition from construction and bridge loans. This is great for those 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:

Amidst the wide range of options available for structuring a deal in today’s market, Mezzanine and Equity options provide our clients with the opportunity to pursue larger ventures. Qualified and experienced investors may even be able to secure a deal with as little as a 5% down payment.

*Rates are estimates and based on the assumption of Max LTV. Lower LTV options would allow for lower rate options in the market