Commercial Lending Rates Sub 6%???

Question

I came across a local Credit Union willing to do 6.25% on a mobile home park.

Are there any commercial lenders out there beating that?

Robert C. · Answer

Just saw 5.6% today on an owner-user industrial property from a good size regional bank.Most of the other quotes were in the 6.5% range.One bank that specializes in what I'll call A- debt quoted it at Prime + 1%

I do expect rates will slowly...and I mean slowly grind lower.   The regional bank that quoted that deal currently has a 1.87% cost of funds.   5.6% is still well above the historical 3% net interest margin target for lenders.

Logan M. · Answer

My biggest park is 38 units so I don't get the good stuff

Robert C. · Answer

How many pads?   6.25% is a competitive rate.  I saw a similar quote three weeks ago on a small park from a NC credit union.   50+ pads can go agency with a lower rate, but lots of nuiances with agency and MHP.In general, we're living in a 6.25% world on fully marketed deals.   High quality locations, recent construction, and good leases / occupancy history will yield a little better than 6.25%, the opposite will yield a little worse.  I'm seeing decent owner occupied deals getting mid 5s for decent properties / businesses with decent deposits.  Overall rate bids are tight, right now lenders are differentiating themselves on non-rate items before bending on margins.:  Total proceeds, recourse, covenants, ect.

Tim Kirk · Answer

My local bank just offered me 6.5% for a 5 year ARM with a 20 year amoritization. That's the cheapest local rate I've heard or seen

Logan M. · Answer

When you say slow are you thinking over 3-5 years?

Erik Estrada · Answer

It will come down to the location, strong property financials, and the PG's experience/credit managing this asset type. CRE financing has a wide spectrum of rates and underwriting criteria. I would highly suggest looking at more local banks/credit unions as they will be very familiar with the area/asset type.

Logan M. · Answer

I would love to know what others are seeing as well. I have been quoted as high at 9%.

Commercial Lending Rates Sub 6%???

Most Popular Reply