Over the past two years, the commercial real estate sector has been hyper-focused on interest rates. With the Federal Reserve raising the Fed Funds rate from 0% to 5.50%—starting in March 2022 and the most recent hike in July 2023—the industry has been on edge, eagerly anticipating when rates might decline. It’s been almost a year since the last increase, and as we continue to still wait, the anticipation for the Federal Reserve’s next move intensifies. The next Federal Reserve meeting is scheduled for July 30th–31st, one of four Federal Reserve meetings left in 2024, each capable of shifting market expectations .
At Gantry, we understand that waiting for the Federal Reserve to cut interest rates, isn’t an option. The market endures, and our clients—owners, investors, and buyers—still need capital. Our focus is on helping them secure the financing they need, regardless of the interest rate environment. Rather than speculating on future Fed actions, we believe in providing real interest rate insights on real transactions.
In June, Gantry successfully locked in several strategic loans, showcasing that opportunities persist, regardless of interest rate conditions. Discover the specific loans and see how we've navigated these challenges to deliver exceptional results for our clients.
Property Type | Property Size (Approx.) | State | Loan Amount (Approx.) | Debt Yield (Approx.) | Lender Type | Rate | Spread & Index |
|---|---|---|---|---|---|---|---|
Construction Adaptive Reuse | 70 Studios | CA | $10,000,000 | 11.05% | Life Insurance | 8.75% | NA - Quoted Rate |
Hotel | 140 Rooms | CA | $22,000,000 | 9.34% | Bridge | Floating | 4.25% Over SOFR |
Industrial | 229,000 SF | NV | $26,200,000 | 10.24% | Life Insurance | 5.64% | 1.40% Over the 10-Year UST |
Industrial | 179,900 SF | NV | $12,125,000 | 10.24% | Life Insurance | 5.64% | 1.40% Over the 10-Year UST |
Industrial | 90,000 SF | OR | $9,000,000 | 10.24% | Life Insurance | 5.75% | 1.50% Over the 10-Year UST |
Industrial | 56,000 SF | OR | $2,350,000 | 12.15% | Life Insurance | 6.25% | 2.00% Over the 13-Year UST |
Industrial | 80,000 SF | WA | $7,000,000 | 10.20% | Life Insurance | 6.63% | 2.15% Over the 5-Year UST |
Industrial - Flex | 244,000 SF | UT | $8,500,000 | 10.24% | Life Insurance | 5.92% | 1.50% Over the 10-Year UST |
Industrial - Flex | 44,500 SF | CA | $5,000,000 | 19.40% | Life Insurance | 6.23% | 1.80% Over the 10-Year UST |
Industrial - Flex | 152,000 SF | AZ | $13,825,000 | 11.50% | Credit Union | 6.40% | 1.96% Over the 5-Year FHLBC |
Land | 70 Units | CA | $4,000,000 | NA | Bridge | Floating | 7.70% Over the 1-Month SOFR |
Land | 3 Acres | SC | $1,100,000 | NA | Bank | 8.88% | NA |
Medical Office | 28,800 SF | CA | $5,000,000 | 14.73% | Life Insurance | 6.35% | 1.85% Over the 7-Year UST |
Medical Office | 13,000 SF | CA | $2,700,000 | 10.60% | Credit Union | 6.55% | 2.09% Over the 10-Year UST |
Mobile Home Park | 120 Pads | CA | $1,600,000 | 11.47% | Life Insurance | 7.00% | NA |
Multifamily | 70 Units | CA | $5,750,000 | 11.75% | Life Insurance | 5.74% | 1.30% Over the 7-Year UST |
Multifamily | 20 Units | WA | $2,000,000 | 11.98% | Bank | 6.61% | 2.25% Over the 5-Year UST |
Multifamily | 10 Units | WA | $900,000 | 10.43% | Bank | 6.74% | 2.25% Over the 5-Year UST |
Multifamily | 70 Units | OR | $5,100,000 | 12.00% | Bank | 6.50% | 2.30% Over the 5-Year UST |
Multifamily | 200 Units | CO | $3,500,000 | 11.47% | Life Insurance | 7.00% | NA - Equity Investment |
Multifamily / Retail | 5,400 SF | OR | $1,000,000 | 9.80% | Credit Union | 7.13% | NA - Quoted Rate |
Office | 82,000 SF | OR | $5,400,000 | 20.20% | Life Insurance | 6.06% | 1.80% Over the 10-Year UST |
Office / Retail | 131,000 SF | WA | $7,200,000 | 17.62% | Life Insurance | 7.00% | 2.25% Over the 5-Year UST |
Retail | 10,800 SF | CA | $3,550,000 | 12.76% | Credit Union | 5.97% | 1.67% Over the 5-Year UST |
Retail | 14,000 SF | WA | $1,500,000 | 16.00% | Life Insurance | 6.25% | 2.00% Over the 10-Year UST |
Retail | 4,100 SF | UT | $1,200,000 | 11.78% | Life Insurance | 6.77% | 2.26% Over the 5-Year UST |
Retail | 6,000 SF | CA | $1,550,000 | 11.38% | Credit Union | 6.74% | 2.50% Over the 5-Year CMT |
Retail | 37,000 SF | IA | $4,350,000 | 16.90% | Life Insurance | 6.20% | NA - Quoted Rate |
Retail - Grocery Anchored | 40,000 SF | AZ | $10,300,000 | 11.40% | Life Insurance | 6.01% | 1.70% Over the 6.7-Year WAL |
Retail - Grocery Anchored | 81,000 SF | CA | $12,800,000 | 9.90% | Bridge | 8.90% | NA - Quoted Rate |
Self Storage | 800 Units | CA | $5,600,000 | 28.30% | Life Insurance | 5.47% | 1.25% Over the 10-Year UST |
Self Storage | 650 Units | CA | $4,400,000 | 32.00% | Life Insurance | 5.47% | 1.25% Over the 10-Year UST |
Self Storage | 200 Units | OR | $9,500,000 | 16.40% | Bank | 5.88% | 1.65% Over the 5-Year UST |
Self Storage | 175,000 SF | CA | $8,500,000 | 11.00% | Life Insurance | 6.13% | 1.70% Over the 5-Year UST |
Self Storage | 1,300 Units | GA & FL | $12,700,000 | NA | Life Insurance | 6.52% | 2.25% Over the 5-Year UST |
Notes
In the month of June, the 5-Year UST peaked at 4.46% and bottomed out at 4.22%.
In the month of June, The 10-Year UST peaked at 4.43% and bottomed out at 4.21%.
Most commercial and multifamily loans are not priced using the Fed Funds rate.
Floating rate loans are priced off 1-month SOFR (~5.34% today), and that index closely follows the Fed Funds rate; however, most commercial and multifamily loans are priced using the Treasury indices or other indices that follow the Treasury relatively closely.
Debt Yield is included as a metric.
A vital metric representing the property’s NOI divided by the loan amount. This is a metric that many lenders use to size loan requests, providing a clearer picture of risk by focusing on income rather than fluctuating property values. Generally, higher debt yields indicate lower-risk loans.