Commercial Real Estate Financing State of the Market | November 2023
Terrydale Capital
Nov 1, 2023 8 Min read
Terrydale Capital is dedicated to providing our clients with a wide range of financial solutions. We prioritize staying well-informed about the ever-changing market dynamics through continuous communication with our network of capital market experts. Additionally, we proactively explore emerging funding sources that have garnered significant attention. In our commitment to keeping you informed, especially in the dynamic market landscape, we have compiled a selection of financing rates from various regions across the country.
Private Money: Rate Range of 12.00%-15.00%
Amidst the constant unpredictability of financial markets, an ever-growing number of people are turning towards alternative investment options. Private money lending has garnered attention as an appealing choice for individuals seeking to mitigate risks and pursue financial growth. Its inherent advantages and flexible short-term nature make it an attractive option in today's financial environment; however it can come at the expense of higher rates.
Debt Funds & Bridge Lenders: Rate Range of 9.00% – 13.00%
In an era characterized by the persistent unpredictability of financial markets, an expanding cohort of individuals is actively delving into alternative investment options. One such option that has witnessed a considerable surge in popularity is private money loans. These loans hold particular appeal for those aiming to mitigate risk and pursue financial growth, thanks to their inherent advantages and short-term flexibility.
CMBS: Rate Range of 7.50%-8.50%
There is a prevailing expectation that the CMBS loan market, despite its current state, will regain momentum in the future. This optimistic outlook is based on the anticipation that interest rates will eventually stabilize, leading to a resurgence of activity in the CMBS lending sector.
Commercial Banks: Rate Range of 7.50%-9.00%
In response to the volatile market conditions, conventional banks are taking proactive steps to modify their lending strategies and remain competitive. While certain projects are still progressing, there is a discernible trend towards giving higher priority to development, refinancing, and rehabilitation initiatives. To maintain stability in their portfolios, banks are persistently enforcing more rigorous underwriting procedures, possibly placing greater emphasis on existing clients and depository relationships when assessing potential investments, as opposed to new ones.
Credit Unions: Rate Range of 6.50% – 9.00%
Credit unions distinguish themselves from other lenders by offering borrowers the advantage of lower interest rates, making them an attractive option. However, it's essential to be aware that credit unions often adhere to a more meticulous lending approach. This means they may have an extensive underwriting process in place, which can result in longer closing times, especially in the context of current market conditions. While credit unions offer competitive rates, borrowers should be prepared for possible delays in loan approval and closing due to the thoroughness of their underwriting procedures.
Fannie & Freddie: Rate Range of 6.75% – 7.80%
Despite the ongoing market turbulence, transactions involving Fannie Mae and Freddie Mac remain steadfast, highlighting their resilience. We consider these transactions to be among the most favorable choices for residential and multifamily properties. Many buyers are now opting for reduced leverage and are prepared to invest additional equity to secure more favorable interest rates. By embracing this strategy, they can capitalize on the current market conditions and secure improved financing terms for their investments.
FHA: Rate Range of 5.75% -7.50%
The present interest rate trend related to FHA loans in the commercial real estate sector offers borrowers a valuable chance to make a seamless shift from construction and bridge loans. This transition can prove especially beneficial, particularly for individuals aiming to achieve financial stability. By capitalizing on FHA loans during a period of increasing interest rates, borrowers can access long-term financing alternatives that provide enhanced stability and potentially reduced overall expenses.
HUD: Rate Range of 7.00% +
As an up and coming financing type, HUD has been a reliable vehicle for investors as of late. Boasting LTV's of 90% on acquisitions and 80% on refinances with 35-year fully amortizing, non-recourse loans. HUD is ideal for new builds, later vintages, multifamily, long-term holds and maximizing cash-flows.
SBA: Rate Range of 7.50%-10.5%
SBA has emerged as a valuable option for newer investors as well as investors seeking lower down payments at the outset. These options have also been beneficial for owner occupied properties. We have also seen an increase of investors seeking to refinance out of the SBA 7(a) into a 504 option.
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.
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.
Success!
Product has been created successfully!
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.
