In order to combat rapidly rising inflation, in 2022 the Federal Reserve aggressively raised short term interest in multiple 75 basis point increments. At the beginning of 2022, the yield on the 30 day treasury was 0.05%. As we near the end of 2022, the yield is 3.94%. The Federal Reserve has indicated that they will continue to raise short term interest rates in 2023 although at a slower pace and in smaller increments. Commercial mortgage rates are typically priced over the 10 year treasury notes. The longer notes are more market driven and less subject to Federal Reserve action. The 10 year treasury at the end of 2022 is in the range of 3.50% - 3.60%, and commercial mortgage rates are in the mid to high 5% range. The fact that long term rates are lower than short term rates indicates that economists expect the economy to slip into a recession. We will watch these trends closely during 2023.
Commercial mortgage lenders typically lend up to 75-80% on an apartment purchase (down payment of 20-25% necessary). On other types of commercial property, commercial mortgage lenders will typically lend up to 70-75% (down payment of 25-30% necessary). An exception is for owner occupied business real estate (such as a business owner buying his own property). Owner/users may qualify for up to 90% LTV financing.
Select Commercial is a leading Phoenix commercial mortgage lender. We have excellent commercial mortgage loan products and options available for owners and purchasers of commercial real estate buildings throughout the city of Phoenix. While we lend across the entire continental United States, we are able to give our best rates and loan programs to certain areas that we feel are strong markets. Phoenix is one of the cities that we consider to be a premium market and we actively look to originate good quality loans here for our clients. As an experienced commercial mortgage professional, with over 30 years of lending experience, we have many sources of capital to choose from when placing a commercial mortgage request with a lender. Having many lenders to choose from gives us advantages over any one individual source. Finding the lender that fits the needs of each client is what we do best. In the end, you get the best rate and terms available. If you are looking to obtain a commercial mortgage loan, don't hesitate to contact us. There are many reasons why our customers like doing business with Select Commercial. We have a simplified application process and we do not charge any upfront application or processing fees. We typically offer 24-hour pre-approvals with no-cost and no-obligation. Our long term fixed rates are excellent, and we look to close within 45 days of application. Our staff is professional and knowledgeable, and we look forward to working with you on your next commercial mortgage transaction. We arrange financing in Phoenix for the following:
As we begin 2023, the Phoenix commercial real estate loan market is facing some obstacles and challenges. In 2022, we saw rampant inflation and a corresponding rapid rise in increase rates initiated by the Federal Reserve. Higher interest rates (and the resulting higher mortgage payments) caused many existing properties to experience cash flow problems, and many new sales to cancel due to cash flow. Towards the end of 2022, we saw inflation start to lessen, but overall, inflation was still running at a rate exceeding 7% per year. The Federal Reserve announced that they intend to continue to raise short term rates during 2023, although at a slower pace than 2022. Their intent is to get inflation down to their target rate of approximately 2%. Higher rates and tighter cash flow are expected to cause cap commercial mortgage rates to climb and commercial real estate values to drop. While economists expect a slowdown in 2023, most are hopeful that we will not face a steep recession. Corporate profits are strong and employment numbers are solid. While some companies have started to announce layoffs, most believe that they will not be as dramatic as in past recessions. Experts expect unemployment to remain below 6%, a positive sign that this recession will not be severe. Economists expect that lower inflation might cause a softening or rates in the third and fourth quarters of 2023. In 2023, the commercial real estate market will be most strongly affected by the increased rates caused by the action of the Federal Reserve. As we began 2022, the rate on the 10-year treasury was 1.63%. As we begin 2023, this yield is at 3.84%. Since most commercial mortgage loans are based off the 10-year treasury, many properties will not support high leverage commercial mortgages due to insufficient cash flow. This will result in either: sellers will be forced to lower asking prices, or sellers will not put their properties on the market in 2023. There is some positive news for commercial mortgage loans in 2023. Assuming the rate of inflation lessens, we might see a drop in commercial mortgage rates in the third and fourth quarters of 2023. There is a record amount of securitized loans set to mature in 2023 in the commercial mortgage-backed securities (CMBS) market. These loans will need to be refinanced and this high level of activity is likely to generate activity in the capital markets. As we begin 2023, commercial mortgage rates are very volatile, and the market is expected to get off to a slow start. We hope to see a leveling off effect later in the year and a resumption of activity later in 2023.
"As a real estate attorney, I trust that Select Commercial will deliver apartment building loans and commercial mortgages in a timely manner. My clients are always handled in a professional manner, and the rates and terms offered are excellent. I heartily recommend them to anyone seeking an apartment building loan or commercial mortgage financing."
"I spoke to several commercial lenders before finding Select Commercial. I was glad I found Select Commercial because they got me a lower rate and their service was exceptional. If you need a commercial mortgage loan then you need to talk to Stephen. His knowledge of the commercial mortgage industry will save you a lot of time and headaches."
"I needed a business mortgage for my small business. I was referred to several companies that specialize in SBA loans. However, I decided to keep looking and I found selectcommercial.com. I spoke to Stephen who helped me the entire way. The best thing was that he was always accessible. I highly recommend them."
"Select Commercial was very helpful in helping me with my commercial mortgage. I needed to increase my cash flow due to some maintenance issues with my apartment complex. Stephen went over several options and we came up with the best commercial mortgage lender to meet my needs. I got the much needed funds and also lowered my payments."
We are commercial mortgage brokers focused on providing the best commercial mortgage financing solutions for each deal and every client. We manage every detail of the commercial mortgage lending process from start to finish and are proud of the reputation we've established with our clients. We act as your professional mortgage loan advisor to help find the optimal commercial financing solutions for you by offering personalized service and custom tailored loan programs to suit your individual needs... View More
Finance your small business with business loans from Chase. Find a variety of financing options including SBA loans, commercial financing and a business line of credit to invest in the future of your business.
Trinity has the strongest roster of correspondent lenders in Texas, including some of the most sophisticated sources of debt in the market. These lenders routinely invest billions of dollars in commercial mortgages annually. They offer a full range of loan structures, including floating and fixed rate debt, higher leverage mezzanine loans, bridge loans, and even some equity investments. We are also able to provide construction/permanent loans or forward commitments out to a full year.
Harry F. Schwethelm, Jr., Co-founder EmeritusA native of Kerrville, Texas and a graduate of Harvard College and the University of Texas Law School, Mr. Schwethelm has spent his entire career at Trinity Real Estate Finance, Inc. and its corporate predecessors. He left the company on May 31, 2011 after a thirty five year career in the mortgage banking business. Derek R. Stokes, PrincipalEmail: email@example.com » | Download v-card »A resident of San Antonio since 1987, Mr. Stokes is a graduate of Trinity University with a degree, with honors, in Finance and International Business. He joined Trinity Real Estate Finance after graduating from college and is a full time mortgage loan originator and Principal in the San Antonio office.
Trinity Real Estate Finance, Inc. is a young, dynamically growing commercial mortgage banking company based in Texas. We are constantly looking to find ambitious, intelligent and mature individuals who want to become part of our team. No prior real estate experience is required and we hire many employees directly upon graduation from college. All the personnel at Trinity are committed to teaching and mentoring as a strategy for growth.
Send an email to the San Antonio office » RefaTrinity Real Estate Finance, Inc. is a member of Real Estate Finance Associates, a national affiliation of independent mortgage banking firms. Created in 1979, REFA evolved from the pioneering James W. Rouse & Company, the commercial mortgage banking affiliate of the prominent regional mall developer.
Commercial real estate loans work similarly to mortgage loans for personal real estate. One of the main differences is that the loan is secured by a lien against the commercial property rather than a residential property. A lien is a legal claim to a property that can be used as collateral if a loan goes unpaid. In the case of a commercial loan, the lender removes the lien once the loan is paid off. 2b1af7f3a8