CRE Financing Rates Breakdown By Property Type | May 2024
Terrydale Capital
May 1, 2024 7 Min read
By continuously generating quotes for a variety of commercial real estate assets, we remain informed about the ever-evolving market dynamics in real-time. With a commitment to securing the most favorable financing solutions for our clients, we have diligently curated a comprehensive range of financing rates observed nationwide. Tailored to accommodate various asset categories, these rates offer valuable insights into the market landscape as of May 2024.
Multifamily
Rate Range: 5.80% - 11.00%
Quoted Average: 8.11%
As we progress into 2024, agency options persist in leading the market trend by offering highly competitive rates, some even reaching lows below 6%. HUD options continue to demonstrate strength, particularly in the realm of asset refinancing. Furthermore, there has been a noticeable increase in competitive CMBS options. Distressed multifamily properties are increasingly prevalent in the market, presenting abundant opportunities for potential investors. Additionally, investors and property owners should remain vigilant regarding the rapidly growing daily maturities.
Industrial
Rate Range: 7.30% - 11.00%
Quoted Average: 8.52%
As we continue to quote industrial investments, we've noticed a slight decrease in average interest rates associated with this asset class. Particularly noteworthy is the consistent offering of highly competitive rates by credit unions and banks within this market segment.
Self-Storage
Rate Range: 5.50% - 13.00%
Quoted Average: 7.62%
Similar to industrial investments, we've noted a continued slight decrease in average interest rates across the board, primarily stemming from banks and credit unions. We have even been quoting options in the mid 5's.
Retail
Rate Range: 6.75% - 10.50%
Quoted Average: 8.20%
Average interest rates for retail assets have remained steady but we have seen options reach into the 6's. By placing emphasis on tenant profiles and implementing a localized strategy for projects, we've identified credit unions and banks as the most competitive avenues for retail ventures.
Land
Rate Range: 10.00% - 13.75%
Quoted Average: 12.42%
Following the pattern established last year, many traditional lenders continue to show preference for developmental land while exercising caution regarding speculative projects. This stringent criteria has resulted in higher overall rates and a constrained pool of willing lenders.
Single Family Portfolio
Rate Range: 6.96% - 15.00%
Quoted Average: 11.35%
Much like the multifamily sector, agency loans continue to be prominent players in both individual and portfolio projects. Additionally, HUD and CMBS options consistently exhibit significant competitiveness in this arena. However, there have been instances of higher rates as lenders contend with houses 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 expected to experience a significant surge in investment activity. We strongly advise investors interested in 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%
Although lending activity for office assets was exceedingly sluggish in 2023, there are indications of a modest resurgence in lenders offering office loans. However, those participating lenders continue to uphold stringent underwriting requirements.
RV Park
Rate Range: 8.25% - 9.00%
Quoted Average: 8.33%
Despite being a more niche asset class, we have seen increased activity in RV Park investment over the last month. With a wide range of applicable financing routes and a more straightforward underwriting process, we have seen relatively steady rates compared to other assets.
Mobile Home
Rate Range: 7.40% - 9.25%
Quoted Average: 8.33%
With the increasing demand for affordable housing options, many investors are shifting their focus to mobile home parks. Mobile homes have seen advantages such as lower rates and simplified underwriting processes, offering a unique diversification opportunity for any portfolio.
Hotel
Rate Range: 9.00% - 10.50%
Quoted Average: 9.55%
Investment activity in hotels has steadily increased since the beginning of the year. We've observed a growing number of opportunities in the market, accompanied by an expanding range of lending options. Additionally, a broader variety of lenders are becoming increasingly open to this asset class.
*Rates are dependent upon financing leverage, borrower creditworthiness, asset, location, lender and more. For an accurate quote on your commercial asset, contact us at Terrydale Capital or submit your deal to Terrydale Live for a financing quote within 24-hours.
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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.
