What is the current interest rates and term for Commercial?

Question

What is the industry average terms and rates for a commercial building (industrial) in Orange County?

25% LTV and 40% LTV

Amortization for 20 or 25 years

Jessica Zolotorofe · Answer

20-25% LTV is pretty standard. I'm seeing rates in the high 4s to low 5s now on a 15-20 year am. Depends on your creditworthiness, the value of the building, whether you are a high net worth client of the lender, or using a lender for the first time, etc.

Sasha Mohammed · Answer

@Charles Lecky,

Maybe I'm misunderstanding the LTV part, are you saying you want to put down between 25% and 40%? Or you're looking for a loan roughly in that LTV ballpark?

I have lenders that will allow for up to 70% LTV on commercial buildings. Anywhere from 20 year am to 30 year am.

Some of them will offer rates in the low-5's, others are higher. It all depends on how we're qualifying for the loan -- are we in a position to be able to provide tax returns and income for the purposes of qualifying? or is the property currently tenant-occupied where we can qualify based on rents received (cash-flow of the property)?

Are YOU currently occupying (or plan to occupy) the property? what type of business is in there currently? ALL of these questions will go into determining which lender is the best fit for your specific scenario.

I also have a lender in the 7%-9%-range for commercial properties where they don't look at income or taxes and frankly don't care about the cash-flow if the loan amount is under $500k.

Some will have balloon payments, others won't. Some will have prepayment penalties, others won't.

Point being, there are so many options out there at this point, it's difficult to give you "average terms and rates" because frankly, they're all over the board.

Hope this somewhat answers your question :)