CRE Financing Rates Breakdown By Property Type | September 2024
Terrydale Capital
Sep 1, 2024 7 Min read
Our competitive advantage in commercial real estate lies in our ability to provide continuous quotes across various property types, offering real-time insights into market trends. By developing a comprehensive, nationwide database of financing rates across different asset classes, we ensure you have access to the most current data. With this up-to-date information, reflecting September 2024 market conditions, you can confidently make well-informed financing decisions.
Multifamily
Rate Range: 5.18% - 10.25%
Quoted Average: 6.33%
In 2024, Agency options have led market trends with highly competitive rates, some now dipping into the lower 5% range. HUD options remain strong, particularly for asset refinancing. Despite market saturation, CMBS continues to be a reliable choice for investors who can secure that execution. As we move forward, it's crucial for investors and property owners to stay vigilant about the ongoing wave of maturities and closely monitor their own.
Industrial
Rate Range: 6.50% - 11.00%
Quoted Average: 7.79%
As we continue quoting industrial investments, we've noticed a favorable decline in average interest rates for this asset class, with new options emerging at competitive prices. Notably, debt funds have become increasingly competitive in offering attractive rates for industrial assets.
Self-Storage
Rate Range: 6.50% - 11.00%
Quoted Average: 8.39%
Similar to industrial investments, we've seen a gradual decline in average interest rates across various asset classes, largely driven by the increasing competitiveness of debt funds. We've been able to quote numerous favorable options for investors as a result. As of late, we have seen a growing interest in industrial outdoor storage as a niche asset in this class.
Retail
Rate Range: 6.75% - 11.25%
Quoted Average: 8.47%
Average interest rates for retail assets have remained stable, though some options have reached into the 6% range. We've observed a significant increase in multi-tenant and credit tenant deals, as lending institutions have deemed them 'easy to lend on' in the current market with some lenders giving very favorable programs around retail.
Land
Rate Range: 10.00% - 14.75%
Quoted Average: 12.25%
Over the past year, many traditional lenders have adhered to established criteria, favoring developmental land while exercising caution with speculative projects and raw land. These stringent guidelines have resulted in higher overall rates and a more limited pool of willing lenders.
Single Family
Rate Range: 5.10% - 12.99%
Quoted Average: 8.55%
Similar to the multifamily sector, agency loans continue to be pivotal in both individual and portfolio projects. HUD and CMBS options also remain consistently competitive in this space. However, instances of higher rates have emerged as lenders navigate properties intended solely for investment, aiming 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 rapidly growing asset class, with investment activity surging in 2024. Though highly specialized, we strongly recommend that investors seeking portfolio diversification carefully assess and capitalize on opportunities within the data center sector as they become available.
Office
Rate Range: 6.90% - 9.50%
Quoted Average: 8.33%
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. Despite this, some options have risen to be rather competitive in the space.
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: 7.40% - 10.00%
Quoted Average: 9.73%
With the growing demand for affordable housing options, many investors are redirecting their attention to mobile home parks. Mobile homes offer advantages such as lower rates and simplified underwriting processes, presenting a unique diversification opportunity for any portfolio.
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.
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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.
