CRE Financing Rates Breakdown By Property Type | October 2024
Terrydale Capital
Oct 7, 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 October 2024 market conditions, empowers you to make well-informed decisions.
Multifamily
Rate Range: 5.30% - 11.00%
Quoted Average: 7.86%
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. HUD options remain robust, especially in asset refinancing. CMBS offered competitive rates earlier in the year, but oversaturation has made is lose steam slightly. As we move towards the conclusion of 2024 and move into 2025, we anticipate agency options to remain strong.
Industrial
Rate Range: 6.50% - 11.00%
Quoted Average: 7.79%
As we continue to quote industrial investments, we've observed a slight decrease in average interest rates for this asset class with new options rising to the top with competitive pricing. Notably, credit unions and banks within this market segment consistently offer highly competitive rates with debt funds offering some competitive programs for bridge acquisitions.
Self-Storage
Rate Range: 6.55% - 10.00%
Quoted Average: 8.39%
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 steady, though we have seen options reaching into the 6% range. We have seen a large spike in multi-tenant and credit tenant deals as lending institutions have labeled them to be “easy to lend on” in the current market. This has led to favorable programs and rates for investors.
Land
Rate Range: 10.00% - 14.75%
Quoted Average: 12.25%
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%
Much like the multifamily sector, agency loans remain prominent players in both individual and portfolio projects. Additionally, HUD and CMBS options consistently demonstrate significant competitiveness in this arena. However, there have been instances of higher rates as lenders and government programs contend with properties intended strictly for investment purposes, striving to preserve housing availability for genuine homebuyers.
Data Center
Rate Range: 7.50% - 11.55%
Quoted Average: 9.55%
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%
Quoted Average: 8.29%
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%
Quoted Average: 8.33%
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%
Quoted Average: 9.18%
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%
Quoted Average: 9.41%
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.
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.
