Phoenix Commercial Mortgage Loans
Phoenix Commercial Mortgage Rates - Rates updated May 17th, 2021
|Loan Product||Rates (start as low as)||LTV|
|Multifamily Mortgage Rates (Over $6,000,000)||3.02%||Up to 80%||Get Free Quote|
|Multifamily Mortgage Rates (Under $6,000,000)||3.29%||Up to 80%||Get Free Quote|
|Single Tenant Lease Rates||3.52%||Up to 75%||Get Free Quote|
|Business Real Estate Loans||3.77%||Up to 90%||Get Free Quote|
|Commercial Mortgage Rates||3.77%||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 Phoenix. 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. Phoenix 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 Phoenix 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.
Phoenix Commercial Mortgage Benefits
Phoenix commercial mortgage rates start as low as 3.02% (as of May 17th, 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!"
Phoenix Multifamily Loan Information
Migration to Phoenix Highest in the Nation, Driving Continued Apartment Housing Demand
Positive business and lifestyle climates draw new residents and companies to the Valley. Phoenix stands out this year with one of the nation’s fastest-growing economies as firms are drawn to the favorable business environment, lower expenses and an increasingly educated workforce. Many businesses are moving operations out of high cost markets and into the Valley, tapping into the deep roots that finance, insurance and software firms have grown. This will propel Phoenix to the top spot in net migration in 2020, adding more than 77,000 new residents, many of which being young professionals. The Valley is a prime example of activity picking up in secondary multifamily markets at this point in the cycle as the single-family sector has been unable to meet the needs of an expanding metro. Reflective of this is the exceptionally limited availability of traditional workforce housing as the Class B and C apartment vacancy rates sit in the mid-3 percent and high-2 percent ranges, respectively. This will restrain absorption this year, resulting in the majority of new leases stemming from luxury apartments. Investors looking to purchase property in the Phoenix market should definitely look into taking out an apartment loan to finance their acquisition.
Rush of capital flowing into the market to capture remaining upside. Phoenix has been characterized by strong capital migration into the apartment sector this cycle as favorable yields and healthy job gains swell multifamily investor appetites. The Valley led the nation last year in apartment rent growth, creating robust cash flows for owners, which holds buyer interest elevated in 2020. Caps on multifamily rent growth in nearby states encourage private investors to consider acquisitions in Phoenix as the sector here faces minimal legislative threats. The East Valley will remain a target among private and institutional groups for its concentration of finance and insurance companies, often recording an initial yield in the upper-5 percent to mid-6 percent band. Many areas of the market remain the focus of value-add and opportunistic apartment buyers, especially submarkets that have recorded minimal supply growth this cycle, including the West Valley, Mesa and South Phoenix. Phoenix is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Phoenix Multifamily Market Forecast
The Phoenix National Multifamily Index Rank is at 6, up 7 places. Rising asset values and sizable job creation vault Phoenix up seven positions in the 2020 Index.
Employment in Phoenix is up 1.8%. Following a 2.5 percent employment expansion in 2019, Phoenix remains one of the nation’s top job creators with employers adding40,000 workers to company payrolls this year.
Construction in Phoenix is expected to exceed 9,000 units. An impressive wave of apartments is scheduled for delivery this year, eclipsing last year’s total by almost 1,200 units and accounting for the greatest supply increase in at least 20 years.
Vacancy in Phoenix is up 40 bps. Moderated leasing activity due to limited Class B/C apartment availability will support a vacancy bump to 4.3 percent.
Rent in Phoenix is up 8.6%. Rent growth remains strong this year, bringing the average effective rent up to $1,280 per month after a 9.7 percent advance was registered last year.
Investment opportunities in Phoenix remain strong for those looking to finance their next purchase with an apartment loan. Assets near major employment nodes including Glendale and Tempe Town Lake will continue to receive strong investor interest this year as workers seek short commutes in these areas. We highly recommend any investors looking to buy in the Phoenix 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.
Phoenix 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 Phoenix 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.
Phoenix Commercial Mortgage Loans
Ahwatukee Foothills, Alhambra, Camelback East, Camlback Corridor, Central City, Central Phoenix, Cooper Square, Deer Valley, Desert View, Downtown, Encanto, Estrella, Maryvale, Metrocenter, Moon Valley, North Mountain, North Phoenix, Paradise Valley, Roosevelt, South Mountain, South Phoenix, Sunnyslope.