October 2, 2017

Current Market Interest Rates – September 2017

Interest rates on bank-quality commercial real estate loans increased for all property types in September 2017 and remain above their marks from a year ago. The yield on the benchmark 10-year Treasury Bond increased month-over-month, and bankers are starting to become a bit more cautions relative to CRE lending, accounting for the increase in borrowing rates. Other benchmark interest rates are available from the Wall Street Journal.

Collateral TypeChangeCurrent MonthPrior MonthPrior Year
Office4.31%4.13%3.82%
Multifamily3.83%3.69%3.48%
Hotel4.76%4.59%4.35%
Retail4.38%4.20%3.83%
Industrial4.23%4.07%3.77%

Assumptions

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