Philadelphia Commercial Mortgage Loans
Philadelphia Commercial Mortgage Rates - Rates updated May 7th, 2021
|Loan Product||Rates (start as low as)||LTV|
|Multifamily Mortgage Rates (Over $6,000,000)||3.00%||Up to 80%||Get Free Quote|
|Multifamily Mortgage Rates (Under $6,000,000)||3.27%||Up to 80%||Get Free Quote|
|Single Tenant Lease Rates||3.50%||Up to 75%||Get Free Quote|
|Business Real Estate Loans||3.75%||Up to 90%||Get Free Quote|
|Commercial Mortgage Rates||3.75%||Up to 75%||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 city of Philadelphia. 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. Philadelphia 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 Philadelphia borrowers looking to purchase or refinance a commercial property. If you are looking to obtain a 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.
Philadelphia Commercial Mortgage Benefits
Philadelphia commercial mortgage 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 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!"
Philadelphia Multifamily Loan Information
Widespread Renter Demand Drops Vacancy to Record Low; High Yields Draws Apartment Buyers From Nearby States
Construction cranes move beyond downtown as effective multifamily rents climb higher. Philadelphia’s robust education, healthcare, and technology sectors continue to support net in-migration, adding to already-strong renter demand. The metro’s greater residential needs will be met by record supply additions, yet vacancy will drop to a two-decade low this year. Construction activity is shifting away from core neighborhoods toward the Pennsylvania suburbs. Fewer than 1,000 apartments will open in Center City this year, less than half the arrivals from 2019, abating upward pressure on vacancy in the downtown submarket. Numerous multifamily deliveries are instead going to King of Prussia and Bala Cynwyd, near suburban office and retail centers. These live-work-play districts appeal to apartment renters seeking convenience at living costs below downtown rates. Fewer openings in other parts of the market are encouraging faster rent growth, particularly in Bucks, Delaware, and Chester counties. Effective rates are advancing by slightly wider margins among Class A and B multifamily units, contributing to a metro-wide pace that denotes Philadelphia as one of the top performing Northeast markets in terms of apartment rent growth. Investors looking to purchase property in the Philadelphia market should definitely look into taking out an apartment loan to finance their acquisition.
Investors keep focus on popular residential neighborhoods. Improving apartment operations continue to pique investor interest, particularly downtown and in Philadelphia’s key suburban residential hubs. Buyer competition for listings in Center City, University City, King of Prussia, and along the Main Line support elevated per multifamily unit sales prices in those areas. Parties seeking lower entry costs may turn to adjacent submarkets, such as Northeast Philadelphia, where some apartment renters are also relocating for more affordable rents. Yield-oriented investors can find opportunities for above market cap rates in less central suburban towns such as Willow Grove. Overall, first-year returns lie in the high-6 percent band, exceeding those of other major Northeast/Mid-Atlantic metros, distinguishing Philadelphia among out-of-market investors. Philadelphia is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Philadelphia Multifamily Market Forecast
The Philadelphia National Multifamily Index Rank is at 24, up 1 place. Tightening vacancy and climbing rent boost Philadelphia’s placing in this year’s NMI.
Employment in Philadelphia is up 0.7%. About 20,000 jobs will be created in 2020 as a low-4 percent unemployment rate constrains hiring compared with last year.
Construction in Philadelphia is expected to exceed 5,600 units. Roughly 100 more units will arrive this year compared with 2016 when a then-record 5,500 apartments were completed. Last year approximately 5,200 rentals opened.
Vacancy in Philadelphia is down 20 bps. An above-average number of apartments being absorbed will help reduce the metro-wide vacancy rate to 3.2 percent in 2020, its lowest year-end value since 2000.
Rent in Philadelphia is up 4.7%. The average effective rent will rise to $1,450 per month this year following a 5.2 percent rate of improvement in 2019.
Investment opportunities in Philadelphia remain strong for those looking to finance their next purchase with an apartment loan. Upcoming large-scale office developments in Conshohocken and Newton Square may drive increased multifamily investment into these areas in expectation of higher renter demand. We highly recommend any investors looking to buy in the Philadelphia market to reach out to us regarding a multifamily loan.
Data provided by Marcus & Millichap.
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.
Philadelphia Commercial Mortgage Loan Options
Our staff is professional and knowledgeable, and we look forward to working with you on your next commercial mortgage transaction. We arrange financing in the city of Philadelphia for the following:
- Multifamily Building 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.
Philadelphia Commercial Mortgage Loans
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