California Commercial Mortgage Rates
At Select Commercial, we've built a solid reputation in the California commercial mortgage sector, offering tailored solutions for a variety of commercial properties across the state, with loans starting at $1,500,000. As experts in commercial real estate financing, we also understand the increasing demand for multifamily investments in California. Whether you're interested in multifamily units or exploring other commercial property options, our comprehensive commercial mortgage rates page gives a detailed look at the best rates available across the 48 states.
California Commercial Mortgage Rates - updated 12/03/23
|Loans Over $1,500,000||Get Free Quote|
|Commercial Real Estate Loan||6.62%||Up to 75%|
|Single Tenant Lease||6.42%||Up to 75%|
|Business Real Estate Loan||6.52%||Up to 90%|
California Commercial Mortgage Benefits
CA commercial mortgage rates start as low as 5.72% (as of December 3rd, 2023)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multi family , 75% on commercial (90% with SBA)
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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Distress is currently low in the commercial real estate market. After Signature Bank and Silicon Valley Bank failed, there was widespread concern that other regional and local banks would fail due to the high levels of commercial real estate loans held in their portfolios. With the exception of some market sectors, most commercial mortgage portfolios have performed well. Usually, during times of market uncertainty, commercial real estate distress levels increase dramatically. Current levels of distress are low by historical standards. At the end of 2022, the level of commercial real estate assets under distress was only 1.2% of the total national sales volume. This number is important to watch as many loans face maturity and higher rates upon refinance in 2023.
MSCI, Inc. estimates the volume of loans maturing in 2023 at $400 billion. The Mortgage Bankers Association pegs the amount at over $700 billion. Many analysts predict that loan defaults will increase for two reasons: many of these maturing loans will need to be refinanced at higher rates (and may suffer cash flow problems) and there are fewer active lenders in the market due to the recent bank failures. Loan underwriting has tightened up as the result of global financial conditions and the average loan to value has been dropping on new originations. Many properties have been able keep pace with the market due to escalating rents and strong appreciation. Other properties, mainly in the office and retail sectors, have suffered due to higher vacancy factors and fixed long-term rental rates. Operating income growth has been strong in the multifamily and industrial markets, which represent about 35% of the maturities in 2023. Revenue growth in the office market has been flat for the past five years and vacancy rates have risen. This sector, which accounts for about 26% of 2023 maturities, is expected to see a significant increase in distress and defaults as many properties will not underwrite well enough to pay off existing loan balances.
In February 2023, Trepp Inc., a data analytics company, reported an increase of commercial mortgage-backed securities loans (CMBS loans) going into special servicing. They estimate the percentage of these loans at 5.2%. Many of these properties, including office buildings and retail centers, may be subject to distressed sales. In addition, many borrowers with adjustable-rate loans also face distress unless they hedged their risk with interest rate caps. These adjustable-rate borrowers are seeing current rates generate debt payments which exceed the net operating income of the property and an inability to raise rental rates to keep pace with the increases in debt service. Many of these borrowers will need to either sell the property in a distress sale or invest more capital into the property and refinance for lower loan amounts.
National, regional, and local banks hold more than half of the total amount of commercial real estate loans which will mature in 2023. So far, we have not seen distress levels high enough that would threaten the financial stability of these institutions. Most lenders are likely to extend impending maturity deadlines as opposed to foreclosing as foreclosure would cause losses. Many will employ other methods, including extensions and workouts, for the foreseeable future.
Most analysts agree that the problems encountered by Silicon Valley Bank and Signature Bank are not applicable to other small and local banks with commercial real estate portfolios. These two large bank failures were caused by much more specific situations. Silicon Valley Bank was too concentrated in the venture capital and technology sectors and did not diversify their lending. Signature Bank was too narrowly concentrated in the cryptocurrency sector, a market sector under intense scrutiny of federal regulators.
The commercial real estate market is very varied. There are many different sectors, geographic areas, and borrower types. Banks that lend to this market are able to diversify their risk by lending to a wide variety of borrowers and limiting their exposure to any one particular area or property type. Lenders who employ diversified lending practices and have conservative underwriting guidelines are likely to experience little or no distress or financial losses during this current market cycle.
Some commercial mortgage lenders lock rates at application, some lenders lock rates at commitment, while others lock rates prior to closing. We are currently in the midst of an increasing rate environment. Rates quoted at application may increase dramatically during the loan application progress, if not locked. It is very important to understand your lender’s procedure upfront to avoid potential confusion.
In order for a commercial mortgage lender to issue a firm loan approval, they will want to understand the financial condition of the borrower, as well as the fundamentals of the property. The borrower will be expected to supply his personal financial statement showing total net worth and liquidity. He will also need to provide a schedule of real estate owned demonstrating experience managing similar properties. Lastly, the borrower’s credit scores will needed. For the subject property, lenders will look closely at the current rent roll, operating statements showing income and expenses, copies of all leases, and other pertinent property information.
Commercial mortgage rates are determined by many different factors, including property type, location of the property, loan-to-value ratio, debt service coverage ratio, debt yield, borrower’s net worth, liquidity, credit rating and level of experience. Commercial mortgage lenders look at all of these factors to determine the riskiness of the loan before setting rates. Loans with the lowest risk profile will get the best commercial mortgage rates. As the potential risk increases, commercial mortgage rates usually increase.
Commercial mortgage loans are viewed differently by lenders than residential loans. Home loan lenders look strictly at the borrower’s income and credit in order to qualify. Commercial mortgage lenders look at the subject property’s rent roll, operating statements, and other factors to determine the cash flow or net income potential. Very strong (low risk) commercial mortgage loans might be priced lower than home loans, while weaker performing properties (higher risk) might be priced higher.
Most commercial mortgage loans today are fixed for 5, 7, or 10 years and come with a 25-30 year amortization schedule. Loans can be recourse (personal guarantee) or non-recourse (no personal guarantee). Commercial mortgage loans typically carry prepayment penalties, whereas residential home loans usually do not. Specific terms will be determined by your lender’s underwriting team after your application is reviewed.
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 commercial real estate loan provider. We have excellent commercial real estate loan products and options available for owners and purchasers of commercial real estate. While we lend across the entire continental United States, we are able to give our best commercial mortgage rates and loan programs to certain areas that we feel are strong markets. California is one of the states 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 real estate 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.
California Office Commercial Real Estate Loan: Navigating the 2023 Office Rental Landscape
In 2023, the California office rental market is not just about space; it's about strategic investment opportunities. With the rise of hybrid work models and the evolving needs of businesses, commercial real estate loans in California have become a pivotal tool for companies to secure prime office spaces. Here's a deep dive into the current state of office rentals and the role of commercial real estate loans.
Financing the Post-Pandemic Office Space:
The aftermath of the COVID-19 pandemic saw a dip in demand for office spaces. However, as businesses in California pivot towards hybrid work models, there's a resurgence in demand. California Office Commercial Real Estate Loans are facilitating this transition, helping businesses acquire flexible office spaces that cater to the new normal.
Tech Hubs and Real Estate Investments:
Regions like Silicon Valley and San Francisco are not just tech hubs; they're investment hotspots. As tech companies redefine office environments, the need for strategic financing solutions like commercial real estate loans becomes paramount. These loans are empowering businesses to invest in innovative spaces that foster collaboration and innovation.
Stabilizing Rents and Strategic Investments:
While rent prices in major Californian cities are stabilizing, it's the perfect time for businesses to invest. With the aid of California Office Commercial Real Estate Loans, companies can lock in favorable lease terms, ensuring long-term stability and financial prudence.
More Than Just Space – Amenities Matter:
Modern offices in California offer more than just workspaces. They come equipped with amenities like fitness centers and tech infrastructures. Financing these premium spaces requires comprehensive commercial real estate loan solutions tailored to the unique needs of businesses.
The Future of Office Spaces and Financing:
The demand for office spaces in California is on an upward trajectory. As businesses seek prime locations and state-of-the-art facilities, the role of commercial real estate loans becomes even more crucial. These loans offer businesses the financial flexibility to adapt and thrive in a dynamic market.
The 2023 office rental landscape in California is intertwined with the world of commercial real estate financing. As businesses seek to navigate the challenges and opportunities of the market, California Office Commercial Real Estate Loans stand out as a strategic tool, enabling growth, flexibility, and innovation. With a deep understanding of office commercial real estate loans, Select Commercial is the trusted partner for businesses aiming to secure prime office spaces in this evolving landscape. To explore how Select Commercial can assist you further in your office real estate endeavors, get a free quote today.
California Industrial Commercial Real Estate Loans: A 2023 Perspective
In the ever-evolving landscape of commercial real estate, 2023 stands out as a pivotal year for industrial properties in California. With businesses expanding and the state's economy rebounding, the demand for industrial spaces is on the rise. Enter California Industrial Commercial Real Estate Loans, the financial catalyst driving this growth.
The 2023 Industrial Boom:
The industrial sector in California has witnessed a significant uptick in 2023. From logistics hubs to manufacturing units, businesses are on the lookout for expansive spaces to cater to their growing needs. This surge in demand has made it imperative for companies to secure strategic financing solutions, and California Industrial Commercial Real Estate Loans are at the forefront of this movement.
Financing Emerging Trends:
Emerging trends in the industrial real estate sector, such as data centers and specialized manufacturing units, have reshaped the market dynamics in 2023. These specialized properties often come with unique requirements and hefty price tags. Tailored commercial real estate loans offer businesses the financial flexibility to invest in these niche sectors, ensuring they stay ahead of the curve.
Navigating the Midyear Outlook:
By mid-2023, specific segments within the industrial sector, including multifamily units and neighborhood retail, have shown robust growth. Leveraging commercial real estate loans allows businesses to tap into these thriving segments, ensuring a diversified investment portfolio.
Price Index Insights:
The Commercial Property Price Index in August 2023 indicated a dynamic shift in property prices, especially in the industrial sector. For businesses looking to invest, this is the opportune moment. With the right commercial real estate loan, companies can lock in properties at competitive rates, ensuring long-term profitability.
The Future is Bright:
The outlook for industrial commercial real estate in California remains optimistic. As the state continues to grow as a hub for innovation and business, the demand for industrial spaces will only increase. California Industrial Commercial Real Estate Loans will play a crucial role in fueling this growth, offering businesses the financial backing they need to succeed.
2023 is a landmark year for industrial commercial real estate in California. With the market poised for growth and businesses eager to expand, California Industrial Commercial Real Estate Loans emerge as the linchpin, bridging the gap between demand and investment. With a profound understanding of industrial commercial real estate loans, Select Commercial stands as the go-to partner for businesses aiming to secure prime industrial spaces in this burgeoning landscape. To explore how Select Commercial can assist you further in your industrial real estate endeavors, get a free quote today.
California Retail Commercial Real Estate Loans: A 2023 Market Insight
The retail landscape in California has always been dynamic, but 2023 stands out as a transformative year. As businesses adapt to post-pandemic consumer behaviors and the rise of e-commerce, brick-and-mortar retail spaces are evolving. California Retail Commercial Real Estate Loans have become an essential tool for businesses to navigate this change and secure prime retail locations. Here's an in-depth look at the 2023 retail real estate market and the pivotal role of commercial real estate loans.
The Resurgence of Brick-and-Mortar:
Despite the challenges of the past, 2023 has seen a noticeable rebound in brick-and-mortar retail in California. With consumers craving in-person shopping experiences, businesses are keen on securing prime retail spaces. California Retail Commercial Real Estate Loans are facilitating this resurgence, enabling businesses to invest in strategic locations.
Tech-Driven Retail Spaces:
Regions like Silicon Valley and the Bay Area are not just tech hubs; they're also retail innovation centers. As technology integrates deeper into the retail experience, businesses require modern spaces that cater to tech-savvy consumers. Commercial real estate loans in California are empowering these businesses to invest in such innovative retail environments.
Stable Retail Fundamentals:
By mid-2023, the retail fundamentals in California have stabilized, making it an opportune time for businesses to invest. With the aid of California Retail Commercial Real Estate Loans, businesses can lock in properties at competitive rates, ensuring a profitable return on investment.
Beyond Just Shopping – Experience Matters:
Modern retail spaces in California are not just about selling products; they're about offering experiences. From interactive tech zones to wellness centers, these retail spaces are multifunctional. Financing such multifaceted spaces requires specialized commercial real estate loan solutions tailored to the evolving needs of the retail sector.
The Future of Retail and Financing in California:
The demand for retail spaces in California is projected to grow steadily. As businesses vie for prime locations and aim to offer unique shopping experiences, the role of commercial real estate loans becomes even more crucial. These loans provide businesses with the financial flexibility to adapt and innovate in a rapidly changing market.
The 2023 retail landscape in California is a blend of tradition and innovation. As businesses strive to meet the changing needs of consumers, California Retail Commercial Real Estate Loans emerge as the strategic ally, enabling growth, adaptability, and forward-thinking investment. With a profound understanding of retail commercial real estate loans, Select Commercial stands as a trusted partner in this journey. Businesses aiming to secure prime retail spaces and navigate the evolving retail environment can benefit immensely from Select Commercial's expertise. To explore how Select Commercial can assist you further, get a free quote today.
California Hotel and Motel Commercial Real Estate Loans: A 2023 Overview
In the dynamic world of commercial real estate, 2023 has emerged as a transformative year for the hotel and motel sector in California. As the hospitality industry adapts to post-pandemic consumer behaviors and the evolving travel landscape, securing prime locations becomes essential. Here's a comprehensive look at the 2023 hotel and motel real estate market and the significance of commercial real estate loans.
The 2023 Hospitality Resurgence:
After a period of uncertainty, California's hotel and motel industry is witnessing a resurgence in 2023. With travelers returning and domestic tourism booming, there's a renewed demand for quality accommodations. California Hotel and Motel Commercial Real Estate Loans are playing a pivotal role, enabling businesses to invest in strategic locations and cater to this demand.
Financing the Future of Hospitality:
The aftermath of the pandemic saw a shift in traveler preferences, with a notable inclination towards boutique hotels and motels offering unique experiences. To capitalize on this trend, businesses are turning to specialized commercial real estate loans tailored for the hotel and motel sector.
Tech-Driven Hotel and Motel Spaces:
In regions like Silicon Valley and the Bay Area, the integration of technology into the hospitality experience is more pronounced than ever. From smart rooms to AI-driven concierge services, the hotel and motel industry is innovating. Commercial real estate loans in California are facilitating this tech-driven transformation, empowering businesses to offer next-gen experiences.
Strategic Investments in a Stabilizing Market:
By mid-2023, the hospitality market fundamentals in California have shown signs of stabilization. This presents an opportune moment for businesses to invest. With the aid of California Hotel and Motel Commercial Real Estate Loans, businesses can secure properties at competitive rates, ensuring a sustainable return on investment.
Beyond Just Accommodation – Experience is Key:
Modern hotels and motels in California are not just about providing a place to sleep. They're about crafting memorable experiences, from wellness retreats to cultural immersions. Financing such multifaceted spaces requires a deep understanding of the industry, something that specialized commercial real estate loans offer.
The 2023 landscape for hotels and motels in California is ripe with opportunities. As businesses seek to innovate and cater to the evolving needs of travelers, California Hotel and Motel Commercial Real Estate Loans emerge as the strategic partner, enabling growth, innovation, and long-term success. For businesses eyeing the hospitality sector, now is the time to invest, innovate, and inspire. With a deep understanding of hotel commercial real estate loans, Select Commercial stands as a trusted ally in this journey. To explore how they can assist you further, get a free quote today.
What areas of California does Select Commercial provide financing?
Select Commercial provides commercial real estate loans throughout the state of California including but not limited to the areas below.
• Pomona • Pasadena • Placer • Plumas • Rancho Cucamonga • Riverside
• Riverside • Sacramento
• Salinas • San Benito • San Bernardino • San Diego • San Francisco • San Joaquin • San Jose • San Luis Obispo • San Mateo • Santa Ana • Santa Barbara • Santa Clara • Santa Clarita • Santa Cruz • Santa Rosa • Shasta • Sierra • Simi Valley • Siskiyou • Solano • Sonoma • Stanislaus • Stockton
• Sunnyvale • Sutter • Tehama • Thousand Oaks • Torrance • Trinity • Tulare • Tuolumne • Ventura • Vallejo • Yolo • Yuba