Oakland Apartment Loans
|Oakland Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Multifamily 5 Year Fixed Loan Rates||2.64%||Up to 80%||Get Free Quote|
|Multifamily 7 Year Fixed Loan Rates||2.78%||Up to 80%||Get Free Quote|
|Multifamily 10 Year Fixed Loan Rates||3.00%||Up to 80%||Get Free Quote|
|Oakland Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Multifamily 5 Year Fixed Loan Rates||3.25%||Up to 80%||Get Free Quote|
|Multifamily 7 Year Fixed Loan Rates||3.26%||Up to 80%||Get Free Quote|
|Multifamily 10 Year Fixed Loan Rates||3.27%||Up to 80%||Get Free Quote|
Select Commercial has excellent Oakland multifamily loan products and options available for owners and purchasers of multifamily properties throughout the city of Oakland. Whether you are looking to finance a small apartment building, a complex with hundreds of units, or a co-operative, we can help you find the optimal financing solution to meet your apartment mortgage loan needs. While we lend across the entire continental US, we are able to give our best rates and loan programs to certain areas that we feel are strong markets. Oakland is one of the cities 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 Oakland CA borrowers looking to purchase or refinance an apartment property. We offer apartment loans with terms and amortizations up to 30 years, recourse and non-recourse, and many options for prepayment. We typically approve apartment building loans within 1 day and usually close within 45 days of application. Our clients love our simplified application process, 24-hour pre-approvals with no-cost and no-obligation, great rates and terms, fast closings and personalized service. If you are looking to purchase or refinance an apartment building, don't hesitate to contact us.
Oakland Apartment Loan Benefits
Oakland Apartment loan rates start as low as 3.00% (as of May 7th, 2021)
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on apartment financing
• Terms and amortizations up to 30 years
• Apartment loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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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!"
Oakland Apartment Loan Types We Serve
If you are looking to purchase or refinance a Oakland apartment building, don't hesitate to contact us. We arrange financing in the city of Oakland for the following:
- Large urban high-rise apartment buildings
- Suburban garden apartment complexes
- Small apartment buildings containing 5+ units
- Underlying cooperative apartment building loans
- Portfolios of small apartment properties and/or single-family rental properties
- Other multi-family and mixed-use properties
Oakland Multifamily Loan Information
Blossoming Tech Scene Breathing More Life Into Oakland; Value-Add Options Remain Widespread
Tech firms like Square setting stage to boost Oakland presence. Apartment availability in Oakland remains tight, staying near 4 percent as sustained job creation in the urban core drives market wide multifamily rental demand. Mobile payment processor Square recently moved into a 356,000-square-foot building in downtown Oakland with the capacity to hold 2,000 employees, putting even more pressure on the area’s already-tight apartment vacancy rate. This move could spur more relocations to Oakland as companies seek lower business costs in a market with high growth potential. Additional employment gains are supported by increased venture capital investment into Oakland-based startups, providing these firms with more power to expand and create opportunities for job seekers. To account for the expected pool of new jobs, multifamily developers are elevating their interest in Oakland as 4,600 apartment units are on tap for 2020, the highest annual total this millennium. Much of the focus will be on the urban core, where a variety of 200-plus unit apartment complexes are on track for finalization, although neighborhoods around the University of California, Berkeley will also witness substantial construction activity. Investors looking to purchase property in the Oakland market should definitely look into taking out an apartment loan to finance their acquisition.
Commuter suburbs giving investors higher-yield options. Strong asset appreciation continues to drive apartment investment in Oakland as the average price per multifamily unit has risen 25 percent to $290,600 since the end of 2016. While the recently implemented statewide rent control measure may impact appreciation rates moving forward, Oakland’s strengthening economy and expanding white-collar labor force remain strong selling points to many buyers. Downtown Oakland will stay popular for investors seeking Class C multifamily assets as apartment units can be purchased for the metro average and cap rates in the mid-4 percent range can be attained. Suburban communities such as Alameda, Hayward and Richmond will also remain targeted areas for workforce housing as returns are higher, extending into the mid-5 percent band, 60 to 70 basis points above the market average. Oakland is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Oakland Apartment Market Forecast
The Oakland National Multifamily Index Rank is at 11, down 2 places. An uptick in vacancy steadies rent growth, reducing Oakland’s rank in the Index this year.
Employment in Oakland is up 1.1%. Organizations will slow their pace of hiring this year as just 13,300 workers are added to payrolls. In 2019, job creation reached 19,000 employees.
Construction in Oakland is expected to exceed 4,600 apartment units. Construction will hit its highest level in more than two decades as builders look to provide some relief to the area’s tight conditions.
Vacancy in Oakland is up 20 bps. Development will be most pronounced in the urban core. Amid an influx of new units, market vacancy will climb to 4.1 percent. Last year, the reading remained flat at 3.9 percent.
Rent in Oakland is up 3.1%. The average effective rent will rise steadily to $2,495 per month in 2020, building on last year’s 4.9 percent boost.
Investment opportunities in Oakland remain strong for those looking to finance their next purchase with an apartment loan. Rental demand in Oakland’s suburbs will continue to grow as residents get priced out of the core, providing investors opportunities in suburban areas with near-3 percent vacancy rates. We highly recommend any investors looking to buy in the Oakland market to reach out to us regarding a multifamily loan.
Data provided by Marcus & Millichap.
Apartment Loan Trends in 2020
At the start of 2020 the market outlook did not indicate any significant factors that would cause major trouble in the multifamily market. Market indicators suggested that demand for housing, especially for apartment rentals, would remain healthy, thus continuing to generate new construction of multifamily buildings. Both the high number of permits and starts over the past couple of years led experts to believe that developer confidence is very high in the multifamily market. Market experts predicted an annual completion of 340,000 apartment units over 2020, way above the 300,000-annual average for the past five years. Over the last couple of years, the multifamily market has seen absorptions outperform expectations due to both changes in lifestyle and demographic preferences and new supply has consistently taken longer to be built. These two factors have helped the market to perform stronger than expected in the past and should continue throughout this year. Market data indicated that rent growth would remain strong in 2020, growing 3.6% (which is above the historical average). In terms of mortgage origination, low interest rates and strong multifamily performance were expected to help loan volumes grow. Experts predicted that the origination volume in 2020 will increase by 5.7% to $390 billion. Market data indicated that cap rates have more room to decline, which would lead to increasing property values and should drive up origination volume. However, with the current outbreak of Covid-19, the overall economy has been in flux. The stock market has crashed and commercial mortgage interest rates have been severely impacted. Huge metros such as New York have all but shut down much economic activity and entertainment. In this unsteady climate, many investors are scared to purchase commercial real estate and to take out commercial mortgages and apartment loans. Additionally, the oil industry has taken a big hit. Not only are people traveling less due to the pandemic, foreign countries like China and Russia are involved in a huge price war which is driving the price of oil way down. Experts are hopeful that as the weather warms up and public health policy learns how to handle this pandemic, the economy should revert back to its pre-virus strength.
What Happened with Apartment Loans in 2019
The multifamily market ended the 2019 year on a high note. Despite increased levels of new units entering the market, the apartment sector maintained strong and steady growth throughout the year. Vacancy rates throughout the country remained fairly stable, easing investors’ concerns of a significant decline in occupancy due to the high sum of multifamily units delivered. Furthermore, rent growth on the national and metropolitan levels remained healthy throughout the year. While 2019 rent growth was more modest than 2018, it was in line with 2016 and 2017 levels and remained above the national historic average of 3.4%. Based on data provided by the U.S. Census Bureau, multifamily completions increased slightly in 2019 when compared with 2018. The data also show that reported permit growth has increased 3% and starts are up 2%. Although 2019 data is not yet fully complete, these metrics suggest that the supply will remain elevated over the next few years. In terms of multifamily mortgage origination, the most up to date information has surpassed expectations. Mortgage Bankers Association reported that the 2018 mortgage volume came in at about $339 billion, an increase of 18.9% from 2017. While the actual 2019 numbers will not be available until later this year, experts estimate that due to solid fundamentals, low interest rates and heightened demand for multifamily investments, the total origination volume last year was about $369 billion.
The 2019 economy thrived overall. Throughout the year 2.1 million jobs were added which were in line with 2017 number (although it fell short of the 2018 total of 2.7 million). The unemployment rate also continued to decrease in 2019 as it went down 50 basis points to 3.5% at the end of the year. This number matched the lowest unemployment rate in fifty years. The labor market heavily supported increased salaries, as indicated by the 2.8% annual growth in the Employment Cost Index as of September of 2019. While these gains were below the expected amount for a market with such a low unemployment rate they were above the average for the past decade. At the beginning of the year many investors were concerned due to expectations of a recession. There were many indicators that supported this concern such as inverted two and ten year yield curves, an unanticipated rise in the June unemployment rate of ten basis points, an unstable stock market and slowed job growth. However, during the third and fourth quarters of 2019, the economy improved as job growth rose, the unemployment rate fell. This economic improvement has had a clear impact on the multifamily market as more investors are feeling bullish on putting their money into this asset class.
Oakland Apartment Loan Options
Our company has multiple capital sources for these apartment loans, including: Fannie Mae, Freddie Mac, FHA, national banks, regional and local banks, insurance companies, Wall Street conduit lenders, credit unions and private lenders.
Fannie Mae’s multifamily loan platform is one the leading sources of capital for apartment building loans in the US. Fannie Mae is a leader in the secondary market – meaning they purchase qualifying apartment loans from leading lenders who originate these loans for their borrowers. Fannie Mae purchases loans secured by conventional apartments, affordable housing properties, underlying cooperative apartment loans, senior housing, student housing, manufactured housing communities and mobile home parks on a nationwide basis. The Fannie Mae platform has many benefits, including:
- Long term fixed rates and amortizations. Fannie Mae allows terms and amortizations of up to 30 years. Most banks offer only 5 or 10 year fixed rates and 25 year amortizations.
- Non-recourse options. Most banks will require the borrower to sign personally for the loan. Fannie Mae offers non-recourse apartment loans.
- Lending in smaller markets. Many national lenders do not like to lend in rural or tertiary markets. Fannie Mae is a good option for these loans.
- Assumability and Supplemental Financing. Fannie Mae allows their loans to be assumed by a qualified borrower. They also have a program which allows borrowers the ability to come back and borrow additional funds during the life of the loan (subordinate financing).
Freddie Mac Multifamily Loans provide mortgage capital in the secondary market for apartment building loans. Together, Fannie Mae and Freddie Mac control a very large portion of the multifamily loan market. Freddie Mac has a very aggressive program for small balance apartment loans (from $1,000,000 to $7,500,000). Some features of this program include:
- Market size driven. Freddie Mac classifies loans by the size of the overall market: Top, Standard, Small, and Very Small. Rates are best in top market locations (major metropolitan areas).
- Capped costs. Freddie Mac lenders often cap the closing costs at a fixed dollar amount, thereby lowering the overall cost to borrow money.
- Flexible pre-pay penalties. Freddie Mac offers many options for pre-payment penalties, from yield maintenance to step-down to “soft” step-down.
- Interest-Only (I/O) loans. Freddie Mac will allow payments consisting of only interest and no amortization of principal.
- Fixed rate terms. Freddie Mac offers fixed rates of 5, 7, and 10 years, followed by an adjustable period. These loans are called Hybrid/Adjustables. Loans have a 20 year term and a 30 year amortization schedule.
Apartment Lending with Banks and Other Programs
While the agencies (Fannie Mae and Freddie Mac) offer some excellent programs, not every apartment loan applicant qualifies for these programs. We have many excellent choices for these loans with our correspondent banks, credit unions, insurance companies and private lenders. Some examples of these loans include:
- Multifamily loans that require flexible underwriting or those that don’t meet standardized criteria.
- Properties in less than desirable markets, or those that require repairs or updating.
- Properties that don’t cash flow according to industry guidelines or lack stabilized cash flow.
- Borrowers with past credit issues, including foreclosures, short sales, or judgements.
- Borrowers who are not US citizens.
Whether you are purchasing or refinancing, we have the right solutions available for your multifamily mortgage loans. We will entertain apartment loan requests of all sizes, beginning at $1,000,000. Get started with a Free Commercial Mortgage Loan Quote.
Oakland Apartment Building Loans
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