New Jersey Commercial Mortgage Loans
New Jersey Commercial Mortgage Rates - Rates updated July 2nd, 2020
|Loan Product||Starting Rates||LTV|
|Single Tenant Lease Rates||3.51%||Up to 75%||Get Free Quote|
|Commercial Mortgage Rates||3.81%||Up to 75%||Get Free Quote|
|Multifamily Mortgage Rates||3.41%||Up to 80%||Get Free Quote|
|Business Real Estate Loans||3.61%||Up to 90%||Get Free Quote|
Select Commercial is a leading commercial real estate lender. We have excellent commercial mortgage loan products and options available for owners and purchasers of commercial real estate and multifamily buildings throughout the state of New Jersey. While we lend across the entire continental United States, we are able to give our best rates and loan programs to certain areas that we feel are strong markets. New Jersey 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. We have a diverse array of many available loan products to help qualified NJ borrowers looking to purchase or refinance a commercial property. If you are looking to obtain an multifamily building loan or 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.
New Jersey Commercial Mortgage Benefits
New Jersey commercial mortgage rates start as low as 3.41% (as of July 2nd, 2020)
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multifamily , 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
Recent TRUSTPILOT Reviews
Select Commercial Funding Reviews from TRUSTPILOT
A three year journey
"Thanks Stephen for all of your hard work in getting our deal closed! I appreciate your professionalism and patience throughout a complicated process. You always were there for my partner and I whenever we had questions and needed answers quick. It was a pleasure to have worked with you and Select Commercial!"
Commercial Mortgage Rate Trends in 2020
At the beginning of 2020 the overall market outlook did not suggest any crucial factors that would negatively impact the commercial mortgage market. Commercial mortgage lenders and investors expected a very profitable 2020. Almost 65 percent of the top commercial real estate companies believed that commercial mortgage loan originations would go up this year and over 15 percent anticipated an overall rise of over 5 percent. Data released at the beginning of 2020 indicated that commercial mortgage lenders were expected to close over $680 billion of commercial mortgage loans this year. Experts were of the belief that commercial mortgage lenders would remain bullish about making loans. In addition, as commercial mortgages rates were expected to go down most industry leaders were convinced that borrowers in 2020 will have a strong desire to take out commercial mortgage loans. However, with the recent outbreak of the Covid-19 pandemic, the US and global economy has been incredibly unstable. The stock market seems to be bottoming out and commercial mortgage rates have been hit very hard. While the Fed has dropped short term interest rates, long term commercial mortgage rates have actually been rising. Huge cities like New York are shutting down. In this economic climate, many investors are scared to purchase commercial real estate and to take out commercial mortgages. Additionally, the oil industry has been hit hard. Not only are people traveling less due to coronavirus, China and Russia are currently involved in a price war which is driving the price of oil way down. Many people are optimistic that as spring and summer roll in and public health officials learns how to handle this pandemic, the economy should regain its strength.
What Happened with Commercial Mortgage Rates in 2019
As we review the 2019 year, the commercial real estate market continued to flourish as the longest economic recovery in American history continued. Due to both GDP growth and a steady decline in the unemployment rate, 2019 saw the stock market make huge gains. Many investors thought that commercial mortgage rates would go up last year. However, in actuality commercial mortgage rates actually went down three times. These interest rates helped to spur investors to put more money into commercial real estate. With regards to commercial mortgage loan origination, the 2019 fiscal year far exceeded expectations due to solid fundamentals, low interest rates and higher demand for commercial mortgages. While 2018 commercial mortgage volume totaled about $339 billion, an increase of 18.9% from 2017, the 2019 numbers total about $369 billion. On a larger scale, the 2019 economy prospered overall. Over the course of the year about 2.1 million jobs were added to the market. In addition, the unemployment rate decreased about 50 basis points last year, matching the lowest unemployment rate in fifty years. At the beginning of 2019 many investors were expecting a recession. However, the economy improved as job growth rose and the unemployment rate decreased. This economic improvement had an immensely positive impact on the commercial real estate market as more investors rushed to put their money into commercial properties.
New Jersey Commercial Mortgage Loan Options
We arrange commercial mortgage financing in the state of New Jersey for the following:
- Multifamily Loans – we actively lend on garden apartments, high-rise multifamily buildings, student housing complexes, underlying cooperatives, and all other types of residential dwellings. We consider loan requests up to 80% LTV. We offer loans with and without recourse (personal guarantees) and with and without prepayment penalties. We offer fixed rate loans with terms from 3 to 30 years.
- Office Building Loans – we lend on all types of office properties, including multi-tenant and single tenant buildings in all locations. We lend on both owner occupied and investor properties. We typically lend up to 75% LTV on investor properties and up to 90% on owner occupied properties. Most loans are written for either 5, 7, or 10 years at a fixed rate with a 25-year amortization.
- Retail Building Loans – we gladly consider requests for commercial mortgage loans on shopping centers, retail strip centers, and individual retail stores. We are a little bit more conservative on retail loans these days based on the current climate for retailers and will consider LTV ratios of 65%-75% depending on the deal. We actively lend on NNN single tenant retail locations such as Starbuck’s, CVS, Walgreens, Dollar General, and other national credit rated tenants.
- Industrial Property Loans – we love to lend on warehouses, distribution centers, manufacturing facilities and other industrial properties. Often, these properties are owner occupied by the owner’s business. We also lend on multi-tenant industrial properties as well. We look for properties in good locations with access to population centers and transportation.
- Single/Special Use Loans – we have a special lending division that understands small business lending secured by owner occupied businesses such as motels, gas stations, restaurants, car washes, retail stores, and other specialty properties. Many banks have a hard time with this type of lending as they often do not understand the underlying businesses.
- Investment Property Loans – any and all income producing property will be considered. We are cash flow driven lenders and look for properties that generate positive cash flow for their owners. We will consider portfolios of single family residences under this group.
- Bridge Loans – many borrowers do not qualify for regular institutional financing due to various short-term obstacles which need to be resolved before they can qualify for bank type financing. These borrowers often require short term loans, or bridge loans, to overcome these short-term problems.
New Jersey Commercial Mortgage Information and Economic Overview
Commercial real estate investors looking for good opportunity would do well to look at commercial mortgage financing in New Jersey. Due to job growth over the past year, the U.S. economy continued to expand over the last year leading to highest wage increase year-over-year in the last decade. Construction and manufacturing jobs grew by 37 and 12 percent, respectively. At the same time consumer spending also improved. New Jersey’s economic growth was no exception. All of this spending accompanied by huge e-commerce growth has enabled the New Jersey commercial real estate market to once again profit from consumer demand. New Jersey’s industrial real estate market finished last year with a very strong fourth quarter highlighted by 6.5 million square feet of leasing transactions, and over four million square feet of net absorption (driving annual net absorption to 11.6 million square feet). Furthermore, the total available space went down from about 57 million square feet to just over 54 million square feet. The overall vacancy rate dropped 20 bps year-over-year to about 3.3 percent.
New Jersey can also be a great place to obtain commercial mortgage financing in order to invest in multifamily buildings. Knowing exactly where to buy real estate is crucial when investing in the New Jersey multifamily market. One fact that may scare potential commercial real estate investors away is that New Jersey has the highest property taxes of any state in America. However, this frightening statistic also makes New Jersey a high potential investment location. High property taxes should cause personal property ownership rates to decrease. As a result, commercial real estate investors can purchase multifamily homes and apartment buildings cheaply and find a plethora of tenants who will reliably rent for years to come. The average rent for multifamily units in New Jersey’s large cities is typically lower than the national average. The fastest growing rents in the state over the past year were in Trenton where rental prices increased by 5.3%. Apartments in Hamilton saw the second highest annual rent increase, jumping by 4.4%, just under $60 more expensive than last year’s rent prices. The most expensive apartments in the state are located in Hoboken, with an average rent of over $3,470. Coming in at number two are units in Edgewater at an average rent of over $3,160, followed by Jersey City, with an average rent of about $2,920 per month. On the other hand, the lowest priced large city to rent an apartment in is Trenton, where the average apartment rent is $1,122. New Jersey’s smaller cities have followed the national trend by showcasing the fastest rent increases in their state. Orange City has maintained a year-over-year rent growth of 6.8%, while Blackwood apartments are 6.2% more expensive to rent than a year ago. In terms of commercial mortgages, there are over 675 thousand mortgages for commercial real estate properties throughout the state of New Jersey. The average value of these commercial mortgages is over $7.2 million, 32% above the United States average. This data indicates that New Jersey is a great place to take out a commercial mortgage loan.
As previously mentioned, the past year has seen trends heavily favoring industrial and multifamily real estate in New Jersey. Below are some of the biggest developments of the year in New Jersey commercial real estate. About a year ago, 109 Holdings LLC sold the building at 1200 Clinton St. in Hoboken to 1200 Clinton Equity LLC for $87.5 million. In September of 2017 it was reported that 109 Holdings LLC was developing the property, which was already mostly occupied at the time. In 2016, a joint venture of Fields Development Group and Ursa Development Group opened up leasing at 1200 Clinton St. The six-story 159-unit building sat on the site of a former coal burning plant that was decontaminated in 2013. This past January, Equity Residential purchased the development at 198 Van Vorst St. This 131-unit building was finished back in 2013 and as of December of last year it was 92% leased. While Equity Residential did not disclose the price at which it acquired the property, Reonomy data, based on public records, lists the sale price at over $77 million. The priciest acquisition by far in the New Jersey market in the past year came from the hottest asset class in the strongest submarket in the state. On April 1, Roseland Residential Trust, a subsidiary of Mack-Cali Realty purchased the 377-unit Soho Lofts from AEW for over $263 million. This multi-tower building was completed in 2018 and is located right next to the entrance to the Holland Tunnel.
New Jersey Commercial Mortgage Loans
Select Commercial provides commercial mortgage loans and multifamily financing throughout the state of New Jersey including but not limited to the areas below.
• Atlantic County • Essex County • Ocean County • Bayonne • Gloucester • Old Bridge • Bergen County • Gloucester County • Passaic • Brick • Hamilton • Passaic County • Burlington County • Hudson County • Paterson • Camden • Hunterdon County • Salem County • Camden County • Jersey City • Somerset County • Cape May County • Lakewood • Sussex County • Cherry Hill • Mercer County • Toms River • Clifton • Middlesex County • Union City • Cumberland County • Middletown • Warren County • East Orange • Monmouth County • Woodbridge • Edison • Morris County • Elizabeth • Union County • Newark