How are these terms on a commercial multifamily loan?

[Simon Hernandez]

Hello everyone. I'm in the hunt for a commercial multifamily under $525k and I've been offered 7.99%, 30 year fixed with 25% down. Is this in line with what you all are seeing out there? Thanks!

[Syed H.]

These are all bad rates. But that’s also because 30 year products barely exist for commercial RE. Are they also charging any points up front? You are basically getting hard money.

My rates are between 3.5-2.75% for 5-10 year fixed, 25 or 30 year amortization. Depends on size of deal, location, and other deal metrics. 

Even if you believe rates will be higher later (which I don't believe they will by a meaningful amount since the fundamentals of borrowing has changed), there is a reason 30 year product barely exists for commercial. 

Most borrowers don’t WANT it. Why would you lock yourself into a 30 year loan when you can refi out equity every 5-10 and used it to purchase more property? Even if rates are higher, cap rates will be as well and should theoretically have similar yields. 

30 year fixed is for homeowners to think they can afford more house than they actually can. I would never get a 30 yr fixed on my rental portfolio