Sioux Falls Commercial Mortgage Loans
Loans from $1 Million to $25 Million+
Sioux Falls Commercial Mortgage Rates - Rates updated September 25th, 2022
|Loan Product||Rates (start as low as)||LTV|
|Multi-family Mortgage Rates (Over $6,000,000)||5.37%||Up to 80%||Get Free Quote|
|Multi-family Mortgage Rates (Under $6,000,000)||5.47%||Up to 80%||Get Free Quote|
|Single Tenant Lease Rates||5.10%||Up to 75%||Get Free Quote|
|Business Real Estate Loans||5.65%||Up to 90%||Get Free Quote|
|Commercial Mortgage Rates||5.75%||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 buildings throughout the city of Sioux Falls. 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. Sioux Falls 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 Sioux Falls borrowers looking to purchase or refinance a commercial property. If you are looking to obtain a 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.
Sioux Falls Commercial Mortgage Benefits
Sioux Falls commercial mortgage 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 multi family, 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 Loan Trends in 2022
The commercial mortgage market in 2022 has been impacted by two major factors: the ability to rebound from the Covid-19 pandemic and the effect of inflation and higher interest rates. We will start with a discussion about market interest rates. As we began 2022, the 10 year treasury rate was around 1.66%. By June of 2022, this rate had almost doubled to 3.38%. The 10 year treasury rate is one of the most important benchmarks that lenders use when pricing commercial mortgage loans. Due to decades high inflation, the Federal Reserve has been raising rates to slow the rate of inflation. In May of 2022, the Federal Reserve raised the federal funds rate by 50 basis points. In June of 2022, The Federal Reserve raised the federal funds rate by 75 basis points and signaled that they expect to continue to increase rates throughout the remainder of 2022 as they intend to aggressively control inflation by raising rates. Commercial mortgage lending is directly impacted by these Federal Reserve actions. Commercial mortgage rates and U.S. Treasury rates have risen right along with the federal funds rate, making commercial mortgages more expensive than we have seen in years. Many commercial real estate investors are reevaluating potential purchases as higher interest rates are affecting cash flow by lowering the loans amounts available on a commercial mortgage. Since higher commercial mortgage rates cause higher monthly mortgage payments, many commercial real estate deals are not able to support the sane levels of debt as they once did. If this trend continues, we may see a decrease in commercial real estate values and an increase in market cap rates. This is a trend that we are watching closely in 2022.
The other factor impacting the commercial mortgage market is the lingering effects of Covid-19. Commercial real estate and commercial mortgage lending was severely affected by the pandemic. Many businesses were forced to close, and most workers were not able to go to their offices, stores and most other locations. Many commercial mortgage lenders paused their lending activities during the pandemic while they waited for the market to return to normal. Some segments of the commercial mortgage market have rebounded nicely, while others are still suffering. We will offer a brief summary of some of the major commercial asset classes here:
Office Loan Outlook 2022The office sector of the commercial real estate market has been hard hit by the Coronavirus pandemic. During Covid-19, most workers stayed away from their offices and worked from home instead. Employees relocated away from densely populated urban areas in favor suburban and rural locations. This demographic shift affected how employers view their offices. Office vacancy rates are elevated across the country, availability is high, and demand for properties is weaker than other asset classes. Commercial mortgage lenders are wary of lending on office properties for these reasons. One exception in 2022 has been medical office space, as the healthcare industry has performed well.
Industrial Loan Outlook 20222022 is turning out to be another very strong year for investors in the industrial /warehouse real estate market. Existing supply is tight, demand is strong, and rents are increasing, all great signs for the industrial real estate market. This asset class is strongly favored by commercial real estate investors and commercial mortgage lenders and the availability for commercial real estate financing is strong right now. Demand for industrial properties is being driven by growing e-commerce sales and the need for local stock inventory to avoid the supply chain disruptions that began with the pandemic.
Retail Loan Outlook 2022Retail is another asset class that was hard hit by the Covid-19 pandemic. Many stores were forced to close, and customers got more comfortable shopping online. In addition, current inflation rates (along with supply chain problems) are causing many retailers to experience difficulties. In 2022, commercial mortgage lenders look for strong tenants, inflation proof businesses, and industries that are resistant to internet competition. As many economists expect a pending recession, commercial mortgage lenders are very cautious lending on this asset class. Some notable exceptions are properties leased by strong credit tenants such as national drugstores, home improvement chains, and inflation proof businesses.
Hotel/Motel Loan Outlook 2022These property types were hardest hit by the Covid-19 pandemic as most of these types of properties were completely shutdown for many months and produced almost no cash flow. While most of these facilities have reopened, revenues are far below pre-pandemic levels and commercial mortgage lenders are cautiously optimistic about lending. In 2022, occupancy levels are still far below normal, as business travelers have still not resumed extensive business travel. Likewise, employment levels are well below normal in these facilities. Total hospitality employment is still about 20 percent below pre-COVID levels.
Self Storage Loan Outlook 2022The Covid-19 pandemic caused a strong demand for self-storage locations as workers began to work from home. The return to the office in 2022 has been slow as many employers are still operating on a partially or fully remote basis. Many temporary home offices have and will become permanent workspaces which should translate to higher demand for self-storage units in 2022. In addition, many renters relocated out of urban areas during the pandemic and used self-storage facilities to store their belongings until they return. This created high occupancy rates and demand for additional units. Commercial real estate lenders remain positive on the self-storage sector and investors are actively looking for deals.
Mobile Home Park Loan Outlook 2022Mobile home parks remain a solid investment choice in 2022 for commercial real estate investors. Mobile home parks create low-cost housing for lower income workers. With home prices and apartment rental costs at all-time highs in many markets, mobile home parks are enjoying high occupancy rates and are performing strongly. With the possibility of a pending recession, investors view mobile home parks as a recession and inflation proof asset class. Commercial mortgage lenders are bullish in this market and commercial mortgage loan availability is strong.
The commercial mortgage market in 2022 requires investors to focus on the local economy in their markets. They need to understand the lingering effects of the Covid-19 pandemic, as well as an understanding of the national implications of rising interest rates.
2021 Commercial Mortgage Rates Outlook
The COVID-19 pandemic seriously depressed the demand for apartment living space across the Unites States. One of the biggest factors that directly impacts apartment demand and household formation is a given market’s availability of jobs. The pandemic caused many people to be out of work and many other people to work remotely. Consequently, many prospective tenants such as new graduates lived with their parents or friends. With increased hiring in 2021 and many people returning to their in-office jobs, there has been a big rise in the demand for nationwide apartment housing. As more and more young graduates can return to work, this trend should continue throughout 2021. Commercial mortgage rates for apartment buildings have been at all-time lows throughout 2021 and experts don’t anticipate them to go up soon. The office and retail sectors did not fare so well in 2020 due to the pandemic. Many businesses shut down, brick and mortar retail shops had a hard time doing business and many companies implemented work from home policies. Many lenders were very conservative when considering commercial mortgage applications for these sectors. With vaccinations increasing and many states removing restrictions, business profitability has risen throughout 2021. In 2021, we are seeing companies hiring again after a dismal 2020. During 2021, it is estimated that more than 6.5 million workers will be added to company payrolls, many of them needing office space. Commercial mortgage lenders are not extremely bullish on the office sector and commercial mortgage rates, while attractive, are not as low as some other asset classes. Meanwhile, we are not seeing commercial mortgage lenders lend aggressively on retail properties in 2021. While the loans that lenders do fund may be at lower commercial mortgage rates, they aren’t as low as other asset classes and borrowers are having a difficult time obtaining high leverage loans in 2021.
Industrial properties are emerging well positioned from the pandemic and are expected to perform well in 2021 and beyond. The rapid growth of e-commerce, especially during the pandemic, is causing strong demand for industrial and warehouse space. 2021 has been a strong year for industrial absorption and sales prices of suitable industrial space has skyrocketed. Industrial properties currently are receiving very attractive commercial mortgage rates as this market is receiving a lot of attention. Experts believe that close to $578 billion of commercial mortgages and multifamily loans will be funded in 2021. This is over a 30% increase from 2020’s volume of $442 billion. As commercial mortgage rates remain at all-time lows, 2021 is a great time for prospective borrowers to look for commercial mortgage loans. Right now in 2021, commercial mortgage rates can be in the high 2% range for qualified properties and borrowers. Apartment loans above $6 million can qualify for rates in the mid- high 2% range while apartment loans below $6 million are generally being underwritten in 2021 in the low to mid 3% range. Many lenders are financing commercial mortgage loans for other asset types in the low to mid 3% range as well in 2021. Check out our low commercial real estate loan rates and use our commercial mortgage calculator to calculate monthly principal and interest.
Sioux Falls 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 Sioux Falls for the following:
- 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.
Sioux Falls Commercial Mortgage Loans
Select Commercial provides commercial mortgage loans throughout Sioux Falls and the state of South Dakota including, but not limited to, the areas below.
All Saints Historic District, Augustana College, Augustana College Historic Buildings, Avera McKennan Hospital, Central Sioux Falls, Crown Pointe, Downtown Sioux Falls, East Sioux Falls, Elmwood Golf Course, Empire Mall, Falls Park, Joe Foss Field, McKennan Park Historic District, Mystic Meadows, Northeast Sioux Falls, Northwest Sioux Falls, Old Courthouse and Warehouse District, Prairie Tree, Sherman Historic District, Sioux Falls Downtown Historic District, Sioux Falls Historic District, Southeast Sioux Falls, Southwest Sioux Falls, West Pointe, Western Mall