August 29, 2017

Current Market Interest Rates – August 2017

Interest rates on bank-quality commercial real estate loans decreased for all property types in August 2017 and remain above their marks from a year ago, reflecting a positive, yet measured view on the economy and commercial real estate generally. The yield on the benchmark 10-year Treasury Bond was down month-over-month, accounting for the decrease in borrowing rates. Other benchmark interest rates are available from the Wall Street Journal.

Collateral TypeChangeCurrent MonthPrior MonthPrior Year
Office4.13%4.26%3.81%
Multifamily3.69%3.86%3.47%
Hotel4.59%4.73%4.34%
Retail4.20%4.34%3.82%
Industrial4.07%4.21%3.76%

Assumptions

Fixed-rate
DSCR: 1.5x (2.0x for hotel)
LTV: 70% - 80%
Maturity: 10 years
Amortization: 20 - 30 years