Monday, August 22, 2022
Commercial Real Estate Financing Rates August 22nd 2022
Commercial Real Estate Financing Rates August 22nd 2022
These are the average available rates from the CommLoan database of 640+ commercial lenders as of 08/22/22 and are provided for comparison purposes only.
Actual rates are dependent on property and sponsor.
https://www.creconsult.net/market-trends/guide-to-commercial-multifamily-real-estate-loans/
Free Introduction to Commercial Real Estate from NCREA Training Provided by eXp Commercial
June 28th – 30th
7 am – 3 pm PT (each day)
About the NCREA
The National Commercial Real Estate Association (NCREA) is a leader in commercial real estate training, coaching, and consultation. It was founded by Michael Simpson and has helped thousands of real estate agents, brokers, investors, and associations receive the training and coaching to navigate commercial transactions and build a successful career. Their programs are designed exclusively for residential, commercial, and resimercial agents.
This 3-day training event is geared towards those at the beginning of their career in commercial real estate. Agents who attend all 3 days of training and pass the test will receive the NCREA designation.
What You’ll Learn
- Commercial real estate fundamentals
- How to prospect and stand out
- The NCREA patented GRID system, a lead generation program
The course, valued at $600, is free for all agents through this event brought to you by eXp University.
Saturday, August 20, 2022
Apartment rents are shooting up in hundreds of cities across the U.S. Here's why
"You had a lot of people at the end of 2020 beginning of 2021 looking to buy a home and then the housing market really shot up — turned a lot of people away from buying a home towards renting," Brian Carberry, senior managing editor of Apartmentguide.com, told CBS News.
In better news for Americans looking for a place to live, rents have remained relatively flat this year. "We could start to see stabilization as we go into the end of summer," Carberry said. The housing markets around the country that have seen the sharpest rent increases: are the New York City metro area; Boston, Massachusetts; Miami, Florida; San Francisco, California; Seattle, Washington; and Austin, Texas. In Austin, for example, rent prices are up more than 100% compared to 2021. "People are paying more than $1,000 a month additional now compared to a year ago," Carberry said.Renting is cheaper than buying in three-quarters of the country's 50 largest metro areas, according to Realtor.com. On average, first-time homebuyers can expect their monthly payments to top $2,400, versus $1,876 to rent a typical apartment.
"So when that [mortgage] rate starts coming down we then may start to see some movement from renters to buyers, but until that happens we are still seeing a lot of upward pressure on those rental properties," Carberry said.
Friday, August 19, 2022
Commercial Real Estate Symposium Sep 19th & 20th 2022
eXp Commercial is hosting the Commercial Real Estate Symposium on September 19-20 2022! Register now to reserve your seat. Hear from the industry’s top leaders, national economists, and thriving entrepreneurs on the future of the commercial real estate. Dates: September 19-20, 2022
Location: eXp Commercial Campus Request Access Time: 7 a.m. PST - 3 p.m PST
The Commercial Symposium connects CEOs, presidents, owners, and CRE leaders with top agents and brokers to drive innovation in the commercial industry.
Featured presenters include: - Glenn Sanford, Founder + CEO of eXp World Holdings, to provide welcoming remarks and updates on the latest innovations at eXp. - Kevin Harrington, the original "shark" on the hit TV show Shark Tank, shares the most effective methods and procedures to find and catch investors and scale your business exponentially. - Jason Gesing, CEO of eXp Realty, and Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings, to provide company updates. - Michael Valdes, President of eXp Global, to discuss international commercial real estate opportunities. - Craig Kaplan, Chief Customer Officer of Virbela, an eXp World Holdings company, to discuss the pivotal role the metaverse plays in providing businesses with solutions for hybrid- and remote-work options. - KC Conway, Founder, and President of Red Shoe Economics is a recognized expert in commercial and investment real estate with deep knowledge of capital markets, the new regulatory environment, and the availability of data and how it’s reshaping today’s commercial real estate transactions. - Mike Miller, Founder and Chief Operating Officer of Enriched Data, an industry leader that provides nationwide property, ownership, and sales data with state-of-the-art valuation, prediction, and reporting applications for commercial real estate professionals. RSVP today!
Guide To Commercial Multifamily Real Estate Loans
Multifamily commercial real estate loans give investors capital that can be used for acquiring, repairing, or improving multifamily residential properties.
Loans are available for virtually all types of multifamily housing, and many loan programs have specific features that make them well-suited for certain types of housing.
If you need capital for a property, make sure you choose whichever multifamily loan is best suited for your property and the intended purpose.
What is a Multifamily Property?
Multifamily properties are defined as any residential property with at least two units. Duplexes are the smallest, and there’s no limit to how large an apartment complex can be. Triplexes, quadplexes, bungalow courts, garden apartments, multistorey apartment buildings, townhouses, and high-rise condominiums and apartments are some examples of what multifamily properties can be.
In addition to being categorized by size and layout, multifamily properties can also be classified according to the demographic they serve. Standard housing, senior housing, student housing, assisted living, housing cooperatives, manufactured housing, and affordable/low-income housing are among the most common classifications used by lenders.
Mixed-use properties that combine residential units with commercial spaces can also qualify for select multifamily financing products.
Multifamily vs. Single Family
While multifamily properties technically are any properties that have two or more units, a somewhat different definition is commonly used when discussing multifamily loans.
Multifamily commercial real estate loans are generally limited to properties that have five or more units. Many of the aforementioned properties would qualify for multifamily financing, including most bungalow courts, apartments, high-rises, housing cooperatives, townhouses, and similar properties.
Duplexes, triplexes, and quadplexes might still need multifamily financing, but these properties normally don’t qualify for commercial multifamily loans. Instead, loans for properties that have 2-4 units can be obtained from personal real estate lenders. A lender or loan officer who primarily focuses on home mortgages should be able to assist with financing for these properties.
The most classic single-family property is the freestanding house. Owner-owned manufactured homes, townhouses, and condominiums are often also treated as single for the purposes of financing.
Almost all loans listed below are commercial real estate loans for properties with at least five units.
Multifamily Commercial Real Estate Loan Options
FHA Loans
The Federal Housing Administration (FHA) is a division of the Department of Housing and Urban Development (HUD). HUD is tasked with making housing affordable and equitable, and it partly does so by offering multifamily commercial real estate loans through the FHA.
FHA loans (also HUD loans) have some of the most generous terms for various affordable housing properties. In general, these loans are known for high allowed leverage rates, low-interest rates, and available long terms. Properties must meet strict criteria to qualify, but the borrower qualification requirements are lower than many other financing options.
There are several different FHA loan programs available, each of which has its own qualification requirements and benefits:
- FHA 223(f) Loans offer fixed-rate and long-term financing for existing multifamily properties. Properties must be at least 3 years old, without any significant renovations within the past 3 years. Investors may use the FHA 223(f) program as long-term primary financing on properties that will be owned for years.
- FHA 223(a)(7) Loans offer refinancing options for existing debt that multifamily properties have. Properties must currently be financed through another FHA program to qualify. Investors may use the FHA 223(a)(7) program to restructure loan terms and/or take advantage of lower interest rates.
- FHA 221(d)(4) Loans offer some of the most leveraged loan terms available for multifamily properties. Maximum terms include 90% LTV, 40-year amortization, and a 3-year interest-only introductory period. The interest-only introductory period and other terms make FHA 221(d)(4) program a good option for new multifamily construction.
- FHA 241(a) Loans offer supplemental financing for major improvements. These loans can be used to install energy-efficient infrastructure, safety features, or expand properties (in special cases).
- FHA 232/223(a)(7) Loans offer financing for senior and assisted living multifamily properties. The FHA 223 program is primarily used for primary financing, and the FHA 223(a)(7) program is for refinancing FHA 223 loans.
- FHA 242 Loans offer specialized financing for hospitals and healthcare facilities (other than assisted living facilities).
Fannie Mae Loans
Fannie Mae provides financing for low-income housing that might not otherwise qualify for commercial real estate financing.
Income requirements for Fannie Mae's commercial real estate loans are quite strict. Properties must meet one of the following criteria:
- Have 20% of units rented to families that earn less than 50% of the area median income (AMI)
- Have 40% of units rented to families that earn less than 60% of the AMI
- Have 20% of units rented through project-based housing assistance (i.e. Section 8)
Most properties that already participate in housing assistance payment (HAP), low-income housing tax credits (LITHC) or Section 8 can qualify.
For qualifying properties, Fannie Mae’s loan terms are competitive with what other lenders currently offer. Fannie Mae’s terms are especially attractive if traditional financing is unavailable, or difficult to secure.
Freddie Mac Loans
Freddie Mac underwrites real estate loans for both single-unit and multi-unit residential properties. Commercial financing for multifamily properties requires at least five units.
For multifamily properties with at least five units, Freddie Mac offers several different loan programs that afford flexibility. The agency’s programs include:
- Freddie Mac Fixed-Rate Loans offer flexible primary loan financing. The loans are available for both standard and affordable housing, and the balance, term, and leverage allowances have relatively wide ranges within which they can be adjusted. Investors may use Freddie Mac Fixed-Rate Financing as a primary mortgage on properties they intend to hold.
- Freddie Mac Floating-Rate Loans offer similarly flexible primary loan financing, but with a variable interest rate rather than a fixed interest rate. Most of these loans have terms of 10 years or less because of the variable rate, whereas fixed-rate loans sometimes go as long as 30 years. Investors may use Freddie Mac Floating-Rate Financing as a primary mortgage when interest rates are low, or for properties that will be held for a few years but not longer.
- Freddie Mac Fixed-to-Floating Loans combine a short-term variable interest rate with a longer-term fixed one, while still maintaining fairly flexible terms. These loans usually have a 9-year term (2 variable /7 fixed) but are otherwise fairly flexible. Investors might use Freddie Mac Fixed-to-Floating Financing when interest rates are low, or if they want to have more capital available for construction or rehab.
- Freddie Mac Student Housing Loans offer specialized financing for medium and large student housing apartments or townhouses.
- Freddie Mac Senior Housing Loans offer specialized financing for independent living, skilled nursing, assisted living, age-in-place, and memory care facilities.
- Freddie Mac Manufactured Housing Loans offer specialized financing for medium and large mobile home parks, or other manufactured housing communities.
- Freddie Mac Green Advantage Loans offer specialized financing for energy-efficient improvements. Investors must demonstrate that an improvement will result in a direct and substantial green improvement, and they must also commit to reducing water usage by 25%. Freddie Mac Green Advantage Financing is acquired in addition to a primary loan, and the program allows for a 5% higher LTV.
- Freddie Mac Supplemental Loans offer financing for unexpected expenses, such as major improvements or repairs.
- Freddie Mac Small Balance Loans are available for smaller multi-unit properties, including duplexes, triplexes, and quadplexes.
CMBS Loans
Commercial mortgage-backed securities (CMBS) loans are resold as an investment. Investors use them for fixed-rate returns that have low downside risk.
CMBS loans are among the most common non-government loans for commercial real estate,
as they have more lenient requirements than some other private loan programs. They may be used for multifamily properties that can’t be financed via Fannie Mae or Freddie Mac, and commercial, industrial, and mixed-use properties also qualify. Loan amounts can range from as little as $1 million to as much as $1 billion.
Bridge Loans
Bridge loans provide short-term financing that “bridges” a gap. The loans are frequently used when acquiring properties or completing renovations, and almost all property types can be financed.
Most ridge loans have terms of 3-6 months. Underwriting may consider as-is value, as-stabilized value, or value-add plans. Revenues tend to be less important for these loans, as the loans are designed for purposes other than long-term financing. Buildings might not even be occupied for the entire duration of a bridge loan.
Investors may use bridge loans to finance acquisitions and renovations, or they might be used for immediate short-term flips. The latter is a somewhat uncommon use, though, because the flip must be completed within 6 months. Bridge loans have to be refinanced with another loan program whenever a property is held for longer than the loan term.
Conventional Loans
Conventional loans are a multifamily financing option if government-backed and CMBS loans aren’t available. These loans aren’t a suitable alternative for bridge loans, although banks directly underwrite both bridge and conventional loans.
Because banks directly underwrite conventional commercial real estate loans, banks themselves can determine what the lending requirements and loan terms are. Lending requirements aren’t necessarily any more relaxed than government-backed programs, and they can be slightly stricter because there isn’t a government guarantee.
The flexible terms make these loans available for virtually all multifamily properties, however, including distressed ones that might not be financed any other way.
Specific requirements and features depend on what a lender offers, and some lenders have multiple conventional financing options.
How to Get a Multifamily Loan
Financing a multifamily investment property requires evaluating all available programs, including both their eligibility requirements and loan features. Which multifamily commercial real estate loan program is best for a particular property depends on the property details, borrower qualifications, loan eligibility requirements, intended use of funds, and other details.
You can sort through all available loan options manually, or you can do so with an online multifamily loan tool.
Manually Find Multifamily Commercial Loans
While you can sort through loan options yourself, doing so is time-intensive. Only investors who are already familiar with multifamily financing tend to go this route. For instance, you might manually check loans if you already have a lender and loan program you want to use.
In rare cases, manual loan comparison might be necessary for multifamily properties with highly unique considerations.
Using an Online Loan Comparison Tool
For a more streamlined loan comparison process, use the CommLoan commercial loan finder. Simply follow the guided process, and the tool will take you through the complete process of getting quotes. At the end of the process, you’ll receive several loan quotes that can be compared. Check their eligibility requirements and terms, and apply for whichever one best suits your property and purpose.
Once you’ve chosen a quote, a lender will guide you through the remainder of the loan application process. They can help you not only apply to their institution but also apply for any government program that you’re using.
Prepare for Your Loan Application
If you haven’t already compiled these documents and figures, it’ll be helpful to know your property’s basic details, current value, expected value, building costs (if new construction or renovation), occupancy rates, and other relevant details. Additional details may be needed for specific government programs.
Lenders will also likely ask for information about your multifamily real estate investing activity. They may want to know your portfolio’s value, total outstanding loans, property revenues and expenses, ownership structure, and some other information. Your application will be considered based on the property and your current position.
Get Quotes for Multifamily Commercial Real Estate Loans
If you have an upcoming multifamily property acquisition, improvement, renovation, repair, or debt restructuring, begin the process of comparing loan options today. Some loan programs (especially government-backed ones) have longer processing time frames, so financing isn’t something you should delay. Get quotes now for multifamily commercial real estate loans, and ensure that you have enough time to obtain the best possible financing for your property.
Get a Free Commercial Real Estate Loan Quote
Fill out the form below for expert assistance from our team of Loan Consultants.
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Thursday, August 18, 2022
15 Reasons To Join eXp Commercial
Real estate agents looking to get a foothold into the commercial real estate space could face challenges due to the industry’s entrenchment in tradition and old-school attitudes. That’s why the commercial real estate brokerage space is ripe for change and eXp Commercial has emerged as the CRE brokerage to watch. Here are 15 reasons why eXp Commercial is turning heads in the commercial real estate brokerage space.
- One, Big Brokerage – eXp Commercial is not a franchise. It is one big international brokerage. There is no costly overhead, no desk fees, and no regions.
- Generous Commission & Cap – eXp Commercial agents enjoy an 80/20 commission split with a $20K cap. Once capped, agents can earn 100% commission for the remainder of the anniversary year.
- Revenue Share Program – eXp Commercial agents can receive revenue share income from the sales activity of the productive agents they sponsor into the company. Revenue share is much more lucrative than profit-sharing.
- Equity Plan – eXp agents are awarded or can earn shares of eXp World Holdings stock (EXPI: Nasdaq) after certain milestones such as closing your first transaction, when you fully cap, and when an agent you sponsor closes their first transaction.
- Low Fees and Costs – U.S. agents pay a $250/month tech/cloud fee, a $250 broker review, and $100 risk management fee (capped at $1,000/year) per transaction.
- CRE Software and Tech Tools – Included in the $250 tech fee are world-class CRM, lead share/lead generation, collaboration, co-working, and software tools including Buildout, Reonomy, AgentHub, eXp Enriched Data, Skyslope, AirCRE, and TenantBase.
- Access to Data – eXp Commercial agents have access to 278 million property records for data on valuation, market research, capital markets, sales comps, loan information, owner information, building permits, and Environmental, Social, and Governance (ESG).
- Cloud Campus – eXp does not have brick-and-mortar offices. eXp runs on a virtual metaverse that allows agents and staff to connect 24/7 and work from anywhere they want.
- No Territories – Many CREs are limited to a region or territory, but eXp Commercial agents can take advantage of an instant referral network of over 80,000 eXp agents across the globe and collaborate. (Read why collaboration is a core value at eXp.)
- Online Support – eXp Commercial has an entire support staff such as accounting, human resources, brokerage operations, legal, tech support, brokerage operations, and more. It has everything an agent would need to conduct business – all online.
- Marketing Center – No need to wait to create. Create your own customizable marketing material such as flyers, event kits, business cards, and templates, and find brand items such as logos and helpful documents in the eXp Commercial Marketing Center.
- Weekly Training – eXp University offers about 50 live classes a week covering lead generation, social media, sales training, and technology. All classes are free and in case you miss one, it’s recorded and can be found in eXp University’s ever-growing on-demand library.
- Specialized Training – eXp Commercial offers a four-week program called “eXcelerate” that helps new agents learn the basic fundamentals of starting and building a successful commercial real estate career. An “Advisor” program offers junior agents mentoring.
- Healthcare Program – eXp Agent Healthcare provides U.S. eXp Commercial agents with innovative and low-cost healthcare choices. (Read about four eXp agents who are saving thousands each year with eXp Agent Healthcare.)
- Events and Networking – eXp Commercial has a robust calendar of events and symposiums to help connect agents and share industry information.
Further Information/Join:
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eXp Commercial Expands Research and Analytics Capabilities With Addition of Economist KC Conway
BELLINGHAM, Wash. — February 16, 2022 — eXp Commercial, the commercial real estate division of eXp World Holdings (Nasdaq: EXPI), today announced that KC Conway, founder, and president of Red Shoe Economics, will serve as an economic advisor, adding to the company’s research, data and analytics capabilities.
As a recognized expert in commercial and investment real estate, Conway will provide eXp Commercial agents and clients with industry research, data analytics, and economic insight to deepen their knowledge of the complex and evolving commercial market.
Conway brings valuable insights into the shift in capital markets, the new regulatory environment, and the availability of data to reshape today’s commercial real estate transactions. These insights support eXp Commercial’s growth strategy as the company continues to challenge the status quo, offering expertise in traditional brokerage as well as emerging digital and metaverse opportunities that deliver on clients' needs.
“We are pleased to collaborate with KC and his team at Red Shoe Economics,” said James Huang, president of eXp Commercial. “We are at the forefront of the fast-changing commercial real estate landscape and are committed to providing the best resources and training to our agents so they can deliver strong results to clients.”
“eXp Commercial is uniquely positioned to lead the industry, particularly with its investment and capabilities in the metaverse, and we are excited to be a part of their success,” said Conway. “No other company has embraced both the physical and virtual commercial market like eXp. Working with eXp agents across the country, we will identify market trends and opportunities to build their businesses and make sound, economic decisions.” More information about eXp Commercial can be found at expcommercial.com. About eXp World Holdings, Inc.eXp World Holdings, Inc. (Nasdaq: EXPI) is the holding company for eXp Realty®, Virbela, and SUCCESS® Enterprises.
eXp Realty is the fastest-growing real estate tech company in the world with more than 75,000 agents in the United States, Canada, the United Kingdom, Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, and the Dominican Republic, and continues to scale internationally. As a publicly traded company, eXp World Holdings provides real estate professionals the unique opportunity to earn equity awards for production goals and contributions to overall company growth. eXp World Holdings and its businesses offer a full suite of brokerage and real estate tech solutions, including its innovative residential and commercial brokerage model, professional services, collaborative tools, and personal development. The cloud-based brokerage is powered by Virbela, an immersive 3D platform that is deeply social and collaborative, enabling agents to be more connected and productive. SUCCESS® Enterprises, anchored by SUCCESS® magazine and its related media properties, was established in 1897 and is a leading personal and professional development brand and publication.
For more information, visit https://expworldholdings.com.
Source: eXp Commercial Expands Research and Analytics Capabilities With Addition of Economist KC Conway
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🚨 Auction Alert 🚨 I’m excited to announce that a prime 17.25-acre residential development property at 150 Harbor Club Dr, Hobart, IN, is g...
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Just Listed: Golf Sumac Medical Offices | Des Plaines IL Price: $3,900,000 SF: 35,245 Stories: 3 Occupancy: 82.3% Cap Rate: 9.63% * Stabiliz...
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🚨 Auction Alert 🚨 I’m excited to announce that a prime 17.25-acre residential development property at 150 Harbor Club Dr, Hobart, IN, is g...
