Commercial Multi-Family Interest Rates Still Hover Around 5%…

By Rene • March 4th, 2010

Steven Wiltshire of Marcus & Millichap Capital Corporation gave us this great information:

February 19, 2010

Multi-Family Loan Programs > $3 Million

Fixed Rate

Agency Lenders

Term

LTV

Interest Rates

5 Yr.

55 to 80%

4.55% to 5.41%

7 Yr.

55 to 80%

5.15% to 6.01%

10 Yr.

55 to 80%

5.58% to 6.44%

15 Yr.

55 to 80%

Portfolio Lenders*

LTV

Interest Rates

55 to 75%

6.50% to 6.75%

55 to 75%

6.75% to 7.25%

55 to 75%

6.90% to 8.00%

55 to 75%

*Rates based on fixed rate Act/360

Multi-Family Loan Programs < $3 Million

Fixed Rate

Agency Lenders

Term

LTV

Interest Rates

3 Yr.

55 to 80%

4.51% to 4.96%

5 Yr.

55 to 80%

5.03% to 5.45%

7 Yr.

55 to 80%

5.52% to 5.95%

10 Yr.

55 to 80%

5.87% to 6.29%

15 Yr.

55 to 80%

Portfolio Lenders*

LTV

Interest Rates

55 to 75%

6.00% to 6.38%

55 to 75%

6.50% to 6.75%

55 to 75%

6.75% to 7.25%

55 to 75%

6.90% to 8.00%

55 to 75%

*Rates based on fixed rate Act/360

Commercial Loan Programs

Fixed Rate

Portfolio Lenders*

Term

LTV

Interest Rates

5 Yr.

55-75%

6.75% to 6.90%

7 Yr.

55-75%

6.90% to 7.38%

10 Yr.

55-75%

7.25% to 8.63%

15 Yr.

55-75%

Bridge Floating

LTV

Spread Over Libor

Stabilized

65%

225 to 300

Re-Position

80%

275 to 350

Index Rate as of 2-19-10

3-Year Swap

1.85%

5-Year Treasury

2.45%

5-Year Swap

2.79%

7-Year Treasury

3.22%

7-Year Swap

3.38%

10-Year Treasury

3.77%

10-Year Swap

3.88%

30-Day Libor

0.23%

Prime

3.25%

90-Day Libor

0.25%

(*Portfolio Lenders include Banks, Life Insurance Companies and Credit Unions)
Economic Commentary
2-19-10 Treasury prices declined last week, pushing yields upward, as investors reacted to an increase in the Fed discount rate. The Fed Board sent its most explicit signal yet that the emergency supply of liquidity to financial markets is finished – and will eventually reverse – by raising the discount rate from 0.50% to 0.75% last week. Fed officials indicated that the move was meant to encourage banks to borrow from the private market instead of the Fed, and was not a signal of tightening.

The Fed closed four emergency lending facilities this month and are preparing to reverse or neutralize the more than $1 trillion in excess bank reserves they have pumped into the banking system. The Fed portrayed the decision as a “normalization” of lending that would have no impact on monetary policy, repeating that its benchmark federal funds rate, which is now 50 bps lower than the discount rate, would stay low for an “extended period.”

As would be expected, borrowing rates rose in step with increasing yields, which climbed 11–14 bps. Yields on 3-, 5-, 7- and 10-year notes closed the week at 1.51%, 2.47%, 3.25% and 3.80%, respectively.
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For more information, contact:

Steven Wiltshire
Associate Director
Portland, OR
Office: (503) 200-2046
License: CA: 01432879
Steven.Wiltshire@marcusmillichap.com
Terms, rates and conditions subject to change.

www.MMCapCorp.com
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies.
Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc.
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