Oakland Apartment Loans
Loans from $1 Million to $25 Million+
|Oakland Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.37%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||5.12%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||5.08%||Up to 80%||Get Free Quote|
|Oakland Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.47%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||5.22%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||5.18%||Up to 80%||Get Free Quote|
Select Commercial has excellent Oakland Apartment 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. For more information on multifamily loans, check out how to get the best rate on a multifamily loan and how to get the best rates on an apartment refinance.
Oakland Apartment Loan Benefits
Oakland Apartment Loan rates start as low as 5.08% (as of September 25th, 2022)
• 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 multifamily financing
• Terms and amortizations up to 30 years
• Multifamily 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 multifamily buildings
- Suburban garden multifamilycomplexes
- Small multifamily buildings containing 5+ units
- Underlying cooperative multifamily building loans
- Portfolios of small multifamily properties and/or single-family rental properties
- Other multi-family and mixed-use properties
Oakland Apartment Loan Helpful ArticlesHow to Get the Best Rate on a Multifamily Loan
Fannie Mae and Freddie Mac 2022 Update
How To Get The Best Rates On An Apartment Refinance
What Do Underwriters Look for When Evaluating Apartment Loans?
What You Need to Know About Freddie Mac SBL Multifamily Loans
How to Calculate Debt Service Coverage Ratio for Apartment Loans
Apartment Occupancy Levels – Concern in Some Major US Markets
How to Invest in an Apartment Building
Are You Shopping for an Apartment Building Loan?
How to Buy an Apartment Building
What Are Commercial Mortgage Lenders Looking for These Days
How to Qualify for a Great Rate When Refinancing Your Apartment Building
2022 Oakland Apartment Loan Outlook
Apartment Fundamentals Hold Steady During Pandemic - Buyers See Relatively High Cap Rates
A large percentage of East Bay workers were unable to transfer to work from home schedules which kept apartment vacancy rates relatively low during the Covid pandemic. Roughly 24% percent of the jobs in the local market are positions that require traditional office use, as compared with 44% in San Francisco and 36% in San Jose. Employees in these positions were the most likely to leave the Bay Area. As a result, apartment vacancy rates had returned to pre-Covid levels in the third quarter of 2021. Stability is expected in 2022, though competition from the other side of the Bay Bridge will be strong in the Class A apartment sector. The potential for a stronger recovery in the apartment sector which will result in expanding rent growth relies on the rate of economic improvement across the entire Bay Area. As the large tech companies bring their employees back to the office and apartments vacated during the beginning of the pandemic are re-rented, more people will consider East Bay opportunities. Another major concentration of incoming renters are cost-conscious employees. The average apartment rent in Oakland is more than $300 per month less than comparable apartments in the balance of the Bay Area.
Higher investment returns attract regional investment. As apartment economics continue to improve, local purchasers will look to invest in more properties. The opportunity to capitalize on the lower price of apartments as a result of the pandemic is expected to exceed the rest of the Bay Area, although the low point of the market is certainly behind us. Due to the expectation of an extended recovery, many more opportunities may come up in the months ahead. Investors looking to sell in the next few years may act sooner, while other investors might opt out of apartments and invest in less management-intensive real estate instead. These potential sellers will be met with potential new investors looking to own Bay Area apartments at relatively attractive cap rates. Beginning 2022, the average initial return was just under 5%, offering an investment premium of roughly 70 basis points above investment returns in the neighboring markets. <
2022 Apartment Market Forecast and Oakland Apartment Loan EconomicsOakland has a National Multifamily Index ranking of 31. Oakland is experiencing economic recovery challenges and large amounts of new construction, which cause a rank below most other California cities.
Employment is up 3.4%. Job creation will expand in 2022 at the same rate seen in 2021. Employers will add 38,000 new jobs.
New construction will add 5,500 apartments. Construction rate picks up slightly in 2022, growing inventory by 2.5%. The Oakland-Berkeley area will receive roughly one-half of the new apartment units.
Vacancy up 10 basis points. Apartment demand nearly matches new supply in 2022, resulting in a slight increase in vacancy to 3.4%. In 2021, the rate improved 130 basis points.
Apartment rents are up 4.3%. After a 6.9% increase in 2021, the average effective rent is expected to rise to $2,523 per month. Class C apartment properties have the greatest potential for rent growth.
Investment in Oakland apartments. Bay Area investors are eager to purchase East Bay properties with higher returns. A hedge against inflation is a benefit for apartment owners.
Oakland apartment loan rates will start to increase in 2022 as the Federal Reserve starts raising rates to slow the rate of inflation. We will be watching to see if the Oakland apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
2021 Oakland Apartment Market and Trends
Ever since the work from home orders went into effect in the Bay area at the onset of COVID-19, many people living in the densely populated areas of San Francisco looked for larger accommodations in less densely populated locations. Many people needed to either be able to learn remotely or work from a home office. This made many of the smaller San Francisco apartments prohibitive in 2021, which drove demand into Contra Costa County. As a result, the county’s vacancy rate declined from 4.0 percent in the first quarter of 2020 to 2.9 percent halfway through 2021. Experts expect the rise of the Delta variant to keep many of these renters in place through the end of 2021. Some residents will stay in the county permanently as more tech firms such as Facebook, Twitter and Salesforce are adopting hybrid or remote strategies.
Employment in Oakland is up in 2021. About 54,000 jobs are expected to be created in 2021. This should pull the city to within 61,000 jobs of the peak in the 4th quarter of 2019. Construction of new apartment units is expected to rise in 2021 in Oakland. About 5,350 new apartment units will be completed this year. Even with the spike in apartment deliveries, vacancy is expected to come down 50 basis points in 2021, down to a rate of 4 percent. Average effective rent for multifamily units in 2021 is expected to rise 3 percent, to $2,322 per month.
2021 Multifamily Outlook
The COVID-19 pandemic affected the ability of young graduates to find jobs and move into apartments of their own. The demand for apartment rentals is usually fueled by young graduates entering the workforce and moving into rental apartments. Many young adults lived with their parents or friends during the pandemic and into early 2021. As 2021 progressed, many companies reopened their offices and began hiring again which generated record levels of new apartment rentals. This trend should continue through late 2021 as more new workers are able find jobs and move into their own apartments. Many of these new multifamily units are in metro areas of the sunbelt states as workers have been moving out of colder urban areas in favor of more suburban warmer climates.
The tight market in 2021 for new home purchases has caused many would be homebuyers to continue renting. Prices for existing homes have risen due to lack of inventory and the cost of construction has skyrocketed due to increased costs for raw materials. The high cost of purchasing a new or existing home is keeping the demand for rental units very strong in 2021.
During the pandemic, when workers were either out of work or working from home, many people moved out of densely populated urban areas in favor of suburban locations. In 2021, as more employees are returning to their offices, we are seeing demand pick up once again for rental apartments in urban locations. In addition, as more and more retail and dining locations reopen in downtown areas, we expect to see a return of employees to these areas.
During the pandemic, the CDC and local governments instituted a moratorium of evictions. This caused many landlords to suffer economic losses and depressed the value of apartment properties. In 2021, as these moratoriums start to expire, we expect to see strong demand from investors for these properties.
Nationwide, the first half of 2021 saw more than 175,000 new apartments completed and a total of 363,000 for the previous 12 months. A high percentage of these new units were in Texas and other sunbelt states, as more and more people are relocating to warmer climates. Occupancy rates and asking rents have been lower in larger urban markets in the Northeast and other colder climates, while occupancy rates and asking rents have been increasing in these warmer sunbelt climates. These 2021 trends have definitely been driven by the COVID-19 pandemic and we are watching these trends closely to see if these trends persist after the pandemic is over. Check out our low commercial real estate loan rates and use our commercial mortgage calculator to calculate monthly principal and interest.
What Happened with Apartment Loans in 2020
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.
Oakland Apartment Loan Options
Oakland Freddie Mac Apartment loans
Oakland 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.
Oakland Fannie Mae Apartment loans
The Oakland Fannie Mae multifamily loan platform is one the leading sources of capital for Oakland 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).
Oakland FHA HUD Multifamily Loans
HUD (Department of Housing and Urban Development) and FHA (Federal Housing Administration) insured multifamily loans are some of the best financing options for real estate investors and developers. While HUD does not directly make these loans, they do insure multifamily loans made by third party lenders to real estate investors. The third party lender will process the loan in accordance with the FHA HUD guidelines and HUD will underwrite the loan in order to provide the insurance. There are two primary types of HUD insured loans that multifamily investors can take advantage of.
Oakland Apartment Lending with Banks and Other Programs
While the agencies (Fannie Mae, Freddie Mac and HUD) 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:
- Oakland 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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