Historical chart of commercial real estate rates

Member since 2024 · 31 posts · 11 votes

I'm not able to find this on a site like FRED. Currently I'm getting offers in the 9.5-10.5% region but I'd like to see how they've been over the past 20-30 years.

There's always a ton of charts on the 15 yr and 30 yr residential mortgage like this--

15-Year Fixed Rate Mortgage Average in the United States (MORTGAGE15US) | FRED | St. Louis Fed (stlouisfed.org)

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Chris MasonPro Member

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Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes

Quote from @Dav Pohote:

Quote from @Sebastian Bennett:

It depends on the type of loan. Is this a construction loan? FHA loan? conventional loan? By way of example, 9.5% is going to be the low end for construction financing. I've picked up from a few others on the forums the banks rely on the fed rate for their construction rate financing, and this seems to be where the rate currently exists.

It's conventional. The short term loan for rehab isn't a big deal, it's the general 15 year at 9.5% that I'm talking about. I don't see any historical charts for it.

Also, some banks I've talked to require 30% of the balance to be held in their account. Alot of capital tied up when you include a 25% down.

"Average" CRE mortgage rates aren't really relevant to a rehab loan. But what you are saying isn't crazy, "good" CRE mortgage rates, on stabilized assets, are about 3% less than what you are looking at.

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Sebastian Bennett
Investor · Bucks County · Member since 2023 · 196 posts · 157 votes
2y
It depends on the type of loan. Is this a construction loan? FHA loan? conventional loan? By way of example, 9.5% is going to be the low end for construction financing. I've picked up from a few others on the forums the banks rely on the fed rate for their construction rate financing, and this seems to be where the rate currently exists.
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Dav Pohote
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Member since 2024 · 31 posts · 11 votes
2y
Quote from @Sebastian Bennett:

It depends on the type of loan. Is this a construction loan? FHA loan? conventional loan? By way of example, 9.5% is going to be the low end for construction financing. I've picked up from a few others on the forums the banks rely on the fed rate for their construction rate financing, and this seems to be where the rate currently exists.

It's conventional. The short term loan for rehab isn't a big deal, it's the general 15 year at 9.5% that I'm talking about. I don't see any historical charts for it.
Also, some banks I've talked to require 30% of the balance to be held in their account. Alot of capital tied up when you include a 25% down.
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
2y
Quote from @Dav Pohote:

Quote from @Sebastian Bennett:

It depends on the type of loan. Is this a construction loan? FHA loan? conventional loan? By way of example, 9.5% is going to be the low end for construction financing. I've picked up from a few others on the forums the banks rely on the fed rate for their construction rate financing, and this seems to be where the rate currently exists.

It's conventional. The short term loan for rehab isn't a big deal, it's the general 15 year at 9.5% that I'm talking about. I don't see any historical charts for it.
Also, some banks I've talked to require 30% of the balance to be held in their account. Alot of capital tied up when you include a 25% down.

"Average" CRE mortgage rates aren't really relevant to a rehab loan. But what you are saying isn't crazy, "good" CRE mortgage rates, on stabilized assets, are about 3% less than what you are looking at.
2 Reply
Michael Masters
Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes
2y
Quote from @Dav Pohote:

I'm not able to find this on a site like FRED. Currently I'm getting offers in the 9.5-10.5% region but I'd like to see how they've been over the past 20-30 years.
There's always a ton of charts on the 15 yr and 30 yr residential mortgage like this--

I use the site below for Freddie Mac interest rates, not sure of the exact source of it though. I find that the Freddie interest rate is 90% correlated to the prior quarter 10-year Treasury, also shown in the graph.

https://mf.freddiemac.com/aimi

https://www.treasury.gov/resource-center/data-chart-center/i...

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Michael Masters
Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes
2y
Quote from @Dav Pohote:

I'm not able to find this on a site like FRED. Currently I'm getting offers in the 9.5-10.5% region but I'd like to see how they've been over the past 20-30 years.
There's always a ton of charts on the 15 yr and 30 yr residential mortgage
Then I have this chart which adds the Fed rate for both historical and projected rates. This doesn't track as well to the Freddie commercial rate but it gives the Fed's view of future rates.
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
2y
@Dav Pohote, what do you mean by "commercial real estate rates"? Multifamily "commercial" is going to be different than office, industrial, retail, hotel. Are you looking at recourse or non-recourse? Is this for a core property that was constructed in last couple years in a Class A market or a 60's construction in a small town, middle of nowhere.
Then it gets into borrower risk and relationships with lenders.
So I know this doesn't help, but there are many variables that affect commercial rates at any point in the market cycle: i.e. I am looking at loans on a 60 unit value add apartment complex within the last 3 days. And while these are not 15 yr quotes, they have ranged from low 6% fixed five year, full recourse to over 9% floating non-recourse, also 5 yr term.

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Michael K GallagherBusiness Member
Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
2y
Gotta give a 1 up to @Evan Polaski here, the idea that commercial loans and products in general have a ton to do with borrower risk and lender relationships is a big variable. Often times there can also be implications for rates and products depending on the deposits you have with a specific institution as well.
[email protected]614-362-2231
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Dav Pohote
OP
Member since 2024 · 31 posts · 11 votes
2y
Quote from @Evan Polaski:

@Dav Pohote, what do you mean by "commercial real estate rates"? Multifamily "commercial" is going to be different than office, industrial, retail, hotel. Are you looking at recourse or non-recourse? Is this for a core property that was constructed in last couple years in a Class A market or a 60's construction in a small town, middle of nowhere.
Then it gets into borrower risk and relationships with lenders.
So I know this doesn't help, but there are many variables that affect commercial rates at any point in the market cycle: i.e. I am looking at loans on a 60 unit value add apartment complex within the last 3 days. And while these are not 15 yr quotes, they have ranged from low 6% fixed five year, full recourse to over 9% floating non-recourse, also 5 yr term.

After more time dealing with lenders, I see that. It's for a multifamily 8 unit that is down to the studs so value add is necessary. Ie, not currently habitable which is why I didn't find anything under 9%.
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