Sacramento Commercial Mortgage Loans from $1,000,000+
Sacramento Commercial Mortgage Rates - Rates updated April 9th, 2020
|Loan Product||Starting Rates||LTV|
|Single Tenant Lease Rates||3.56%||Up to 75%||Get Free Quote|
|Commercial Mortgage Rates||3.86%||Up to 75%||Get Free Quote|
|Multifamily Mortgage Rates||3.59%||Up to 80%||Get Free Quote|
|Business Real Estate Loans||3.66%||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 city of Sacramento. 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. Sacramento 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 Sacramento 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.
Sacramento Commercial Mortgage Benefits
Sacramento commercial mortgage rates start as low as 3.59% (as of April 9th, 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.
Sacramento 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 Sacramento 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.
Sacramento Multifamily Loan Information
Construction Picks Up Pace as Tight Housing Market Sustains Accelerated Rent GrowthImproving job market and isolated development maintain healthy absorption. A collection of the metro’s top medical providers and insurers are concurrently expanding during 2019, elevating overall job creation and incomes. As a result, individuals continue to relocate to the metro in search of well-paying positions, keeping the pace of household formation robust for a second consecutive year. Consistent demand in 2019 supports new leases surpassing 1,000 units for a third straight year, though heightened completions will outpace overall apartment demand and place slight upward pressure on metro vacancy. Central Sacramento and Folsom will be most impacted by new supply as the two locales account for most of this year’s delivery volume, with both areas welcoming a group of projects that each comprise more than 100 units. Elsewhere, sparse construction and extremely tight C vacancy should benefit Class B leasing velocity in suburbs off Interstate 80 and Highway 50, where overall effective rents trail the metro’s average rate.
Regional investors expand criteria amid rising Class C asset values. Low price points compared with the Bay Area and significant rent gains have supported robust buyer demand for Class C properties over the past several years, boosting the value of these complexes. Entering 2019, the pricing spread between Class C and B assets has tightened in most submarkets, increasing the number of Bay Area and locally based investors that pursue acquisition opportunities in both asset classes. Buyers that target Natomas, Rancho Cordova and other close-in suburbs are likely to find initial returns in the 5 percent range for midsize Class B assets that carry $5 million to $10 million price tags. Class C listings in Arden, Arcade and Midtown Sacramento will continue to receive significant interest from investors that target mid-4 to mid-5 percent first-year returns for sub 30-unit complexes.
2019 Sacramento Apartment Market Forecast
National Multifamily Index rank of 11, down 3 places. Higher vacancy and lower rent gains move Sacramento down three positions in the 2019 NMI.
Employment in Sacramento is up 1.7%. This year 17,000 workers will be added to payrolls. An uptick in health-related hiring drives the increase.
Construction of apartments in Sacramento expected to number 1,820. Delivery volume advances with nearly half of units slated for finalization concentrated in the city of Sacramento. Here, 870 rentals will be added to inventory.
Vacancy in Sacramento multifamily is up 20 basis points. The vacancy rate rises from last year to 3.5 percent in 2019 as a seven-year-high volume of apartments are completed.
Sacramento apartment rents up 5.7%. The average effective rent increases by more than 5 percent for a sixth consecutive year, reaching $1,490 per month in 2019.
Investment in Sacramento apartments is strong. Healthcare-related expansions in Roseville and Natomas generate future demand for nearby apartments, influencing more investors to eye post-2000-built properties and value-add opportunities in both locations.
Data provided by Marcus & Millichap
Sacramento Commercial Mortgage Loans
Land Park • Alkali Park • Mansion Flats • Downtown • East Sacramento • Richmond Grove • Old Sacramento • Green Haven • Medical Center