CRE Financing Rates Breakdown By Property Type | November 2024
Terrydale Capital
Nov 4, 2024 7 Min read
As interest rates begin to slowly lower, we maintain a competitive edge in commercial real estate by continuously generating quotes for various property types as these changes occur. This provides us with real-time market trend insights. To secure the best financing for our clients, we have developed a nationwide database of financing rates across different asset classes. This data, reflecting November 2024 market conditions, empowers you to make well-informed decisions.
Multifamily
Rate Range: 5.30% - 11.00%
Throughout 2024, agency options have lead market trends by offering some of the most competitive rates, with some dipping into the mid to low 5’s. As we move towards the conclusion of 2024 and move into 2025, we anticipate agency options to remain strong. Eye's currently stick to treasuries as many experts try to weigh on the direction they will head.
Industrial
Rate Range: 6.50% - 11.00%
As we analyze industrial investments, we’ve noticed a slight decline in average interest rates for this asset class, with new options emerging at competitive prices. In particular, credit unions and banks in this market segment are consistently providing attractive rates, while debt funds are also offering compelling programs for bridge acquisitions.
Self-Storage
Rate Range: 6.55% - 10.00%
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: 6.40% - 11.25%
Quoted Average: 8.24%
Average interest rates for retail assets have remained stable, although some options are now approaching the 6% range. We’ve observed a significant increase in multi-tenant and credit tenant deals, as lending institutions consider them “easy to finance” in the current market. This has resulted in more favorable programs and rates for investors.
Land
Rate Range: 10.00% - 14.75%
Following an established criteria over the last year, many traditional lenders continue to prefer developmental land while exercising extreme caution to outright avoiding speculative projects and raw land as a whole. These stringent criteria have led to higher overall rates and a constrained pool of willing lenders.
Single Family
Rate Range: 5.00% - 12.99%
Quoted Average: 8.31%
Similar to the multifamily sector, agency loans continue to be key players in both individual and portfolio projects. Moreover, HUD and CMBS options consistently showcase strong competitiveness in this space. However, there have been cases of elevated rates as lenders and government programs address properties intended solely for investment, aiming to maintain housing availability for genuine homebuyers.
Data Center
Rate Range: 7.50% - 11.55%
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: 6.90% - 9.50%
Despite the sluggish lending activity for office assets in 2023, there are signs of a modest resurgence in lenders offering office loans in 2024 despite its continued struggles. However, these participating lenders continue to maintain stringent underwriting requirements. Office remains a tougher asset to lend on; however, specialized office space - such as medical office assets - have a much easier time acquiring funding.
RV Park
Rate Range: 8.00% - 9.00%
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: 7.00% - 10.00%
With advantages such as lower rates and simplified underwriting processes, the smaller present pool of willing lenders make mobile home parks a trickier asset to fund. However, the willing lenders that have an apetite for mobile home parks have remained strong in their commitment to fund them.
Hotel
Rate Range: 8.60% - 10.00%
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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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.
