Commercial Mortgage Rates
We will shortly come out with another report on rates for commercial investment properties.
Commercial Mortgage Rates on Conventional
For general purpose properties like office, retail that are either partially owner occupied or rented out, with loan amounts between $500,000 - $3,000,000 we are seeing rates in the low 6%’s and for some strong borrowers in the upper 5%’s. These are based on 25 and sometimes 30 year amortization schedules. Most fixed period offered are 5 years though we are seeing a few 7 and 10 year fixed program, though rare.
Commercial Mortgage Rates on SBA Loans
Due to the relationship between the LIBOR rate and the PRIME rate most SBA lenders have stopped using PRIME as their index on SBA 7a loans and instead now tie their loan to the 30 day LIBOR rate plus 300 basis points. The combination of the two, is not the effective rate for the borrower but just in effect the index (the 30 Day Libor was at 1.45% on 1/1/09). The funding bank still has to add their margin on top of this combination. Most banks are at 200 to 275 basis points over. For the borrower this is the part of the rate that can be negotiated. The actual effective rates we are seeing for borrower are around 6 - 6.5% on SBA 7a’s.
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