top of page
Writer's pictureAdam Parker

Real Transactions, Real Insights: June 2024

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.

Recent Posts

See All

CMBA 2024: Key Takeaways

Life Company Lenders 3yr – 30yr fixed rate options with IO available and varying prepay flex structures. Max LTV constrained by achieving...

bottom of page