State of the Market – August 2021

As part of our efforts to provide excellent capital solutions to our clients, Terrydale Capital maintains a dialogue with an extensive network of capital market resources and identifies new ones as they arise. Each week, we condense the highlights just for you.

Here’s a quick snapshot of what we see in the current environment:

Private Money: Rate Range of 6% – 14%

The private money space currently has substantial liquidity, and lenders are getting more aggressive as we continue on in Q3. We see this space chasing deals, leveraging higher, and reducing yields to win more deals.

Debt Funds & Bridge Lenders: Rate Range of 3.25% – 9%

Rates continue to get more competitive. More funds were put together this year, but similar to the private money space, output is lower than expected. For Q3 & Q4, we anticipate more aggressive structures to win deals. Terrydale is funding nearly 40% of current transactions through these funds.

CMBS: Rate Range of 3.50 – 5.00%

CMBS is doing full-term IO with lower leverage and getting full-leverage in markets where banks are more conservative. Terrydale is working with a number of these firms and anticipates we will close more CMBS loans this year than any year past.

Commercial Banks: Rate Range of 1.75% – 5.50%

Regional and National Banks are fighting for deals. As mentioned in our previous market update, our banking relationships contribute significantly to our growth and funding solutions. Banks are chasing down rates to forge new connections in the commercial space.

Credit Unions:  Rate Range of 2.55% – 5.00%

CUs continue to be a fantastic resource for our clients. We are closing many loans right now with CU’s that have far more aggressive terms than some of our banking relationships.

Fannie & Freddie: Rate Range of 2.67% – 4.55%

COVID reserves have made a comeback in some situations. Agencies continue to be a stable component in the multi-family space. Interestingly, we’ve seen rates tick up despite the treasuries moving down. Agencies seem to be attempting to slow the wave of loans pushed through to ensure they have enough funds for Q4.

FHA: Rate Range of 2.25% – 4.35%

Recent rule changes on FHA for financing right out of construction have gained traction with developers. Despite the 12+ month process in some cases, these terms are still some of the best structures available in the multi-family space. We anticipate FHA loans will speed up their process towards the end of the year, and their volume will increase.

Life Company: Rate Range of 1.80% and up

This space continues to be very diverse, with alternative financing structures for investors in all asset types. Call us to get more info.

Mezz/JV/Equity: 

Investors have many ways to structure a deal in today’s market. Mezz and Equity structures allow our clients to seek better opportunities with options to position their transaction with as little as 5% down for those experienced and qualified.

Want to see real-time commercial loan quotes in the market? Become a member of our Live Commercial Real Estate Deal platform!

Want to receive Weekly Market Updates, Deal Spotlights, Off-Market Opportunities, and Referral Rewards such as a Peloton?