What Are Office Building Loan Rates Right Now? A Real Look at 2026 Pricing
Terrydale Capital
Jan 13, 2026 31 Min read
If you're shopping for office building financing right now, you're asking the right question. Rates matter. A single percentage point difference on a five million dollar loan costs you thousands of dollars every month. Over the life of the loan, it's hundreds of thousands.
So what are office building loan rates in 2026? The honest answer is: it depends. But that's not helpful. Let me give you the actual numbers we're seeing in the market right now, broken down by loan type and property quality.
Fixed-Rate Office Building Loans
Most borrowers want the predictability of fixed rates. Lock in your payment. Know what you're paying for the next five, seven, or ten years. Sleep better at night.
Here's what fixed-rate office building loans are pricing at right now:
Five-year fixed rates: 6.50% to 7.25%
Seven-year fixed rates: 6.75% to 7.50%
Ten-year fixed rates: 7.00% to 7.75%
Those ranges are wide because your specific rate depends on several factors. Property quality. Location. Occupancy. Loan-to-value ratio. Your financial strength. Lender type.
A Class A office building in downtown Denver with 92% occupancy and investment-grade tenants might get quoted 6.50% on a five-year fixed loan at 65% LTV. That same loan structure on a Class B suburban property with 75% occupancy could price at 7.25%.
The gap between best execution and average execution is roughly 50 to 75 basis points right now. That's significant. On a four million dollar loan, the difference between 6.50% and 7.25% is $30,000 per year in interest expense.
Life Insurance Company Rates
Life insurance companies are among the most conservative commercial real estate lenders in the market. These aren't companies selling life insurance policies to consumers. They're institutional investors managing massive portfolios funded by insurance premium reserves.
Think about their business model. People pay life insurance premiums for decades before claims get paid out. That creates enormous pools of capital that need to be invested safely over long time horizons. Commercial real estate debt fits perfectly. It's stable. It's predictable. It generates steady returns.
Current life company rates for office buildings range from 6.25% to 7.00% for ten-year fixed terms. Some life companies will even go to 12 or 15-year fixed rates, though those typically price 25 to 50 basis points higher than ten-year money.
But here's the reality. Life insurance companies are selective. Very selective. They want Class A or strong Class B properties. They want occupancy above 85%. They want creditworthy tenants on long-term leases. They want major markets or strong secondary markets.
Why so picky? Because they're deploying policyholders' money. They have fiduciary obligations. They need to minimize risk. A life insurance company doesn't want to foreclose on your office building. They want you to make every payment for ten years, then either pay off the loan or refinance with someone else.
Their underwriting reflects that conservatism. Lower loan-to-value ratios, typically 55% to 65%. Stricter debt service coverage requirements, often 1.30x or higher. Longer closing timelines, usually 60 to 90 days. More extensive due diligence on the property, the market, and the borrower.
A medical office building in Seattle recently closed a life company loan at 6.40% fixed for ten years. The property had 94% occupancy, average lease term of six years, and sat on a hospital campus. The building's tenant roster included cardiology practices, imaging centers, and outpatient surgery suites. All creditworthy. All essential services. That's the profile that gets best execution from life companies.
If your property doesn't meet their standards, they simply won't quote. And they move slowly. Expect 60 to 90 days to close. That timeline works for refinances and planned acquisitions but not for competitive deals where you need to move fast.
But if you have the right property and can accept their terms, life insurance companies offer something valuable: long-term fixed rates at competitive pricing with stable, institutional partners who won't surprise you mid-transaction.
CMBS Loan Rates
Commercial mortgage-backed securities loans remain available for office properties, with current rates ranging from 6.75% to 7.50% for five, seven, or ten-year fixed terms.
CMBS loans work differently than traditional bank loans. The lender originates your loan, then pools it with other commercial mortgages and sells bonds backed by those loans to investors. This securitization process allows lenders to offer certain features you won't find elsewhere.
They're non-recourse, meaning you typically don't sign a personal guarantee beyond standard carve-outs for fraud and environmental issues. They allow assumability, which can be valuable if you plan to sell before the loan matures. They'll finance properties that life companies won't touch.
The trade-off is rate. CMBS loans typically price 25 to 50 basis points higher than comparable bank or life company loans. You're paying for the non-recourse feature and structural flexibility.
CMBS loans also come with prepayment penalties that can be expensive. Most use yield maintenance or defeasance, which means paying off the loan early in a low-rate environment costs serious money. If rates rise significantly, the penalty decreases. But if you think you might sell or refinance in three years, understand what early payoff will cost.
An office building in Phoenix recently closed a CMBS loan at 7.10% for a seven-year fixed term. The borrower wanted non-recourse financing and valued the assumability feature for an eventual sale. The rate was higher than a bank would have offered, but the structure made sense for their business plan. They planned to hold the property for at least five years, so prepayment penalties weren't a concern.
Bank Portfolio Rates
Regional and community banks portfolio many of their office building loans, meaning they hold the loan on their balance sheet rather than selling it. These loans can be attractive if you have an existing banking relationship.
Bank portfolio rates for office buildings currently range from 6.50% to 8.00%, depending on the bank's appetite, your relationship, and the property. Many banks offer five or seven-year fixed rates, with some willing to go to ten years for strong borrowers and properties.
Banks also offer more flexibility on loan structure. They might agree to interest-only periods. They'll negotiate on prepayment penalties. They can move faster than life companies, often closing in 30 to 45 days. They'll consider properties in secondary and tertiary markets where life companies won't go.
The challenge with banks right now is that many have reduced their office lending or stopped altogether. Finding a bank actively making office loans takes work. But when you find the right fit, banks can be excellent lenders.
A small professional office building in Boise recently closed a bank loan at 6.85% for five years fixed. The borrower had two other properties financed with the same bank. The relationship mattered. A new borrower at the same bank was quoted 7.50% for a similar loan. That 65 basis point difference adds up to real money over five years.
Banks also tend to favor smaller deals. A three million dollar office loan gets more attention at a regional bank than a thirty million dollar loan. At that size, you're meaningful to them. They'll work with you. They'll return your calls. They'll be flexible when issues come up.
Floating-Rate Bridge Loans
Not every deal works with fixed-rate permanent financing. Maybe you're buying a property with vacancy that you plan to lease up. Maybe you're renovating and repositioning. Maybe you just need short-term capital while you stabilize the asset.
That's where floating-rate bridge loans come in. These short-term loans, typically one to three years with extension options, price off a floating rate benchmark plus a spread.
Current bridge loan rates for office buildings range from 7.50% to 9.50%. The base rate is usually SOFR plus a spread of 450 to 650 basis points. Some lenders use Prime as their base rate.
Bridge loans cost more than permanent financing. But they offer advantages. Higher leverage, often 70% to 75% LTV. Faster closing, sometimes in three weeks. Fewer restrictions on property condition and occupancy. Interest-only payments that preserve cash flow while you execute your business plan.
Let's say you're buying an office building that's 65% occupied. You plan to invest in renovations and leasing to push occupancy to 85% over 18 months, then refinance into permanent financing. A bridge loan at 8.50% interest-only gives you the capital and flexibility to execute that plan.
The rate is higher, but it's temporary. You're trading cost for time and optionality. When you stabilize the property and refinance into permanent financing at 6.75%, your blended cost over the total hold period might be quite reasonable.
Bridge lenders also move fast. Need to close in three weeks on a competitive acquisition? Bridge lenders can do it. Banks take 45 days. Life companies take 75 days. Speed has value in real estate.
What Drives Your Rate
Your specific rate depends on factors you control and factors you don't. You can't control Treasury rates or the broader economy. You can control how you structure your deal and which property you buy.
Property quality matters most. Class A buildings with high occupancy get better rates than Class B buildings with vacancy. A property in downtown Austin prices better than one in a declining suburb. Medical office buildings get better rates than general office space.
Why? Because lenders price risk. Better properties carry less risk. Less risk means lower rates. It's that simple.
Loan-to-value affects pricing. A 60% LTV loan prices 25 to 50 basis points better than a 70% LTV loan, all else equal. Lower leverage means lower risk. Lower risk means lower rates.
Think about it from the lender's perspective. If you default on a 60% LTV loan, they have 40% equity cushion before they lose money. On a 70% LTV loan, they only have 30% cushion. That extra protection is worth something. They'll give you a better rate for bringing more equity.
Loan size impacts rates too. Loans above five million dollars typically get better pricing than smaller loans. Loans above ten million dollars can get even better execution. Lenders have fixed costs to originate and service loans. Larger loans spread those costs over more dollars, making them more profitable at lower rates.
Your financial strength and experience matter. Strong personal financials, significant liquidity, and relevant experience managing office properties all help you get better rates. Lenders trust experienced borrowers more. Trust equals better pricing.
A borrower with five million dollars in liquid assets, no other debt, and ten years managing office properties gets quoted better rates than a borrower with minimal liquidity, high debt, and no office experience. Even if they're buying the same building.
Market conditions change constantly. Treasury rates move. Credit spreads widen and tighten. Lender appetite for office buildings shifts based on their existing portfolio and market outlook. The rate you can get today might be different next month.
Medical Office Gets Better Pricing
Not all office space is created equal in lenders' eyes. Medical office buildings consistently get better rates than traditional office space.
Current rates for medical office properties run 25 to 50 basis points lower than comparable general office buildings. A medical office building that would price at 6.50% might be quoted 7.00% if it were general office space with similar occupancy and lease terms.
Why the discount? Medical office space isn't subject to the same remote work pressures as traditional office. You can't do surgery via Zoom. Physical therapy requires in-person treatment. Imaging centers need patients on site. Healthcare is an essential service that requires physical locations.
Medical office buildings also tend to have longer lease terms and more stable tenants. Healthcare providers invest heavily in their spaces. They install specialized equipment. They build out procedure rooms. That creates stickiness. Tenants don't move as frequently.
Properties on or near hospital campuses command the best pricing. A medical office building within two blocks of a major hospital in Charlotte recently closed financing at 6.35% for ten years. The building was 96% occupied with weighted average lease term of 6.5 years. Tenants included orthopedic surgeons, physical therapy groups, and specialty clinics. All affiliated with the adjacent hospital system.
That same borrower owns a general office building in a suburban business park. Similar size. Similar quality construction. But traditional office tenants. That property refinanced at 7.10%. Same borrower. Same lender. Different asset class. 75 basis points difference in rate.
How to Get the Best Rate
Shopping for the best rate isn't like buying a car where you can get quotes from five dealers and pick the lowest one. Commercial real estate lending doesn't work that way.
Different lenders have different strengths. One bank might offer great rates but want full recourse and a personal guarantee. A CMBS lender might price higher but offer non-recourse. A life company might have the best rate but take three months to close.
The best rate is worthless if it comes with terms that don't work for your situation or a lender who can't close on time. You need to match the right lender to your specific deal.
Here's an example. You're buying an office building and need to close in 30 days. A life company offers 6.40%, but they need 75 days. A bank offers 6.90% and can close in 35 days. Which rate is better?
The one attached to a lender who can actually close your deal. Saving 50 basis points doesn't matter if you lose the property because your lender couldn't perform. The seller won't wait. They'll keep your deposit and sell to someone else.
This is where working with someone who knows the lending market saves you money. We talk to lenders every day. We know who's quoting aggressive rates this month. We know who's pulling back. We know which lenders move fast and which ones take forever. We know how to structure your deal to get the best terms.
We also know which lenders are reliable. Some lenders quote aggressive rates to win business, then re-trade terms during underwriting. They find issues. They adjust pricing. They add requirements. By the time you realize what's happening, you're 30 days into the process and don't have time to start over with a new lender.
Working with lenders who have a reputation for closing deals as quoted matters more than saving 25 basis points on rate.
Rate Locks and Timing
Once you get a rate quote, understand what you're getting. Is the rate locked? For how long? What happens if rates change before closing?
Most commercial office building loans don't lock rates at application. You typically lock during underwriting, often 30 to 60 days before closing. If rates rise during that period, you're protected. If rates fall, you might be stuck at the higher locked rate unless your loan documents allow a float-down option.
Some lenders charge rate lock fees, typically 0.25% to 0.50% of the loan amount. Others include the lock in their standard pricing. Make sure you understand all the costs, not just the interest rate.
A rate quote of 6.75% with a 0.50% rate lock deposit costs more all-in than a rate quote of 6.85% with no rate lock fee. You need to compare total costs, not just the rate.
Also understand what triggers the rate lock. Some lenders lock when you submit application. Others lock when they issue a commitment letter. Others lock only after you accept their term sheet and pay a deposit. The timing matters because rates can move quickly.
What Rates Don't Tell You
Interest rate is important. But it's not the only cost that matters. You need to look at the total cost of the loan over its life.
Origination fees typically range from 0.50% to 1.50% of the loan amount. That's $25,000 to $75,000 on a five million dollar loan. A loan at 6.75% with 1.50% origination fees might cost more over three years than a loan at 7.00% with 0.50% fees.
Prepayment penalties can be enormous on fixed-rate loans. Yield maintenance and defeasance can cost hundreds of thousands of dollars if you pay off a loan early when rates are low. If there's any chance you'll sell or refinance before maturity, understand what early payoff costs.
Recourse versus non-recourse matters to your personal balance sheet. A non-recourse loan at 7.25% might be worth more to you than a recourse loan at 6.85% if you value keeping the lender away from your other assets in a worst-case scenario.
Amortization schedules affect your monthly payment and cash flow. A loan with 25-year amortization has higher monthly payments than one with 30-year amortization, even at the same rate. That impacts your debt service coverage ratio and how much you can borrow.
What About Future Rate Changes
Will office building loan rates go up or down from here? Anyone who tells you they know for certain is lying. But we can look at what drives rates and make educated observations.
Commercial real estate loan rates track Treasury yields plus a credit spread. If Treasury yields fall, commercial loan rates typically follow, though not perfectly. If credit spreads tighten because lenders feel better about office properties, rates improve. If spreads widen because lenders get more nervous, rates go up.
Right now, lenders remain cautious about office properties. That caution keeps credit spreads wider than they were five years ago. As the office market stabilizes and proves it can adapt to hybrid work, spreads might tighten. But that's a multi-year process, not something that happens in the next quarter.
The Federal Reserve's monetary policy influences short-term rates, which affects floating-rate bridge loans more than long-term fixed-rate loans. But Fed policy also influences broader market sentiment, which affects credit spreads on all commercial loans.
Treasury yields depend on inflation expectations, economic growth, and global capital flows. Those are big, complex forces that nobody can predict with confidence.
What you can control is locking in a rate when it makes sense for your deal. Trying to time the market perfectly is a losing game. If you find a rate and terms that work for your business plan, lock it in and move forward.
Finding the Right Rate for Your Deal
Every office building is different. Every borrower is different. Every lender is different. The rate that works for one deal might be wrong for another.
What matters is finding financing that lets you execute your business plan at a cost that makes economic sense. Sometimes that's the lowest rate. Sometimes it's the fastest close. Sometimes it's the most flexible structure.
A value-add deal where you're renovating and leasing up space might work better with a bridge loan at 8.50% than permanent financing at 6.75% if the permanent loan requires 85% occupancy and you're starting at 60%. You need the right loan structure for your situation, not just the lowest rate.
A stabilized property you plan to hold for ten years probably works better with fixed-rate permanent financing, even if you could get slightly lower rates on shorter-term floating-rate debt. Rate certainty has value. Knowing your payment won't change for a decade lets you plan with confidence.
If you're looking to finance an office building and want to understand what rates you can realistically access for your specific property and situation, we can help. We work with the full spectrum of office building lenders and can find you the right combination of rate, terms, and execution.
Connect with our team to explore your office building financing options →
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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.
