June 1, 2017

Current Market Interest Rates – May 2017

Interest rates on bank quality commercial real estate loans decreased across all property types in May 2017.  Rates are slightly below their marks from a year ago, reflecting a positive, yet measured view on the economy and commercial real estate generally. Lender sentiment remains positive with most lenders sticking to their underwriting despite a highly competitive market. Other benchmark interest rates are available from the Wall Street Journal.

Collateral TypeChangeCurrent MonthPrior MonthPrior Year
Office4.19%4.42%4.33%
Multifamily3.80%4.05%3.88%
Hotel4.64%4.90%4.88%
Retail4.23%4.47%4.32%
Industrial4.14%4.35%4.30%

Assumptions

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