San Francisco Commercial Mortgage Loans
San Francisco Commercial Mortgage Rates - Rates updated March 7th, 2021
|Loan Product||Rates (start as low as)||LTV|
|Multifamily Mortgage Rates (Over $6,000,000)||2.94%||Up to 80%||Get Free Quote|
|Multifamily Mortgage Rates (Under $6,000,000)||3.37%||Up to 80%||Get Free Quote|
|Single Tenant Lease Rates||3.50%||Up to 75%||Get Free Quote|
|Business Real Estate Loans||3.70%||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 San Francisco. 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. San Francisco 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 San Francisco 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.
San Francisco Commercial Mortgage Benefits
San Francisco commercial mortgage rates start as low as 2.94% (as of March 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!"
San Francisco Multifamily Loan Information
Household Income Growth Powering Class A Apartment Segment; Steady Supply Additions Outpacing Rental Demand
Builders stay active, keeping pace of multifamily development far above last cycle. Apartment construction in San Francisco will remain historically elevated in 2020 as 3,600 multifamily units are set for delivery, with developers focusing heavily on the Mission District and SoMa areas. This cycle’s annual average completions are nearly 4,000 apartment units, more than double that of the previous cycle as builders capitalize on the area’s growing renter pool and exceptional economic growth. San Francisco will lead the nation in household income growth this year, rising 5.4 percent to $132,300, fueled by the unwavering creation of high-wage jobs. Residents taking these jobs will continue to help fill the influx of new luxury apartments, where the average effective rent hovers around $4,000 per month. Over the past five years, Class A multifamily assets have led the market in rent growth, climbing 21 percent, while the Class B and C apartment segments posted 14 percent and 18 percent gains, respectively. Investors looking to purchase multifamily property in the San Francisco market should definitely look into taking out an apartment loan to finance their acquisition.
Buyers find high-yield opportunities in core pockets. Apartment investment in San Francisco remains strong as dollar volume totaled $3.7 billion during the past 12 months, up 75 percent from the previous period. Multifamily assets near major transit routes throughout Burlingame, Millbrae and San Bruno continue to attract a variety of local buyers, netting cap rates in the upper-3 percent band and purchasing apartment units for roughly $480,000 each — both aligned with market averages. Investors seeking higher returns scoured the Civic Center and Tenderloin neighborhoods, where yields can reach the mid-4 percent range. Similar cap rates may be found in the Mission District area as many investors home in on value-add multifamily properties, seeking to renovate them to more closely compete with nearby luxury rentals. While investor interest in San Francisco remains robust, the recently implemented rent-control bill could impact deal flow in the coming months as it puts ceilings on rent growth, potentially affecting some apartment properties. San Francisco is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 San Francisco Multifamily Market Forecast
The San Francisco National Multifamily Index Rank is at18, down 3 places. Rising vacancy and constrained rent growth placed downward pressure on San Francisco in the 2020 NMI.
Employment in San Francisco is up 2.5%. Hiring activity will be restrained this year as the market’s unemployment rate hovers around 2 percent. Just 30,000 jobs will be created this year, after the addition of 40,000 in 2019.
Construction in San Francisco is expected to exceed 3,600 apartment units. Deliveries will decrease by 700 units relative to 2019, but they will remain near alignment with this cycle’s annual average.
Vacancy in San Francisco is up 60 bps. Net absorption of just 2,100 apartments will support a substantial vacancy increase, driving the rate up to 4.5 percent.
Rent in San Francisco is up 3.2%. Rent growth will sustain its steady clip in 2020 as the average effective rent climbs to $3,027 per month. Last year, the market witnessed a 3.8 percent boost.
Investment opportunities in San Francisco remain strong for those looking to finance their next purchase with an apartment loan. Buyers will continue to invest in San Francisco’s transitioning neighborhoods located near large employers, where cap rates up to 50 basis points above the market average can be found. We highly recommend any investors looking to buy in the San Francisco 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.
San Francisco 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 San Francisco 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.
San Francisco Commercial Mortgage Loans
Sea Cliff • Miraloma Park • Fort Mason • Russian Hill • Presidio Heights • Merced Heights • Golden Gate Park • Inner Sunset • Ocean Beach • Chinatown • Laurel Heights • Monterey Heights • Saint Francis Wood • Buena Vista • Downtown • Presidio • Fort Mason • Embarcadero • Cow Hollow • North Beach