November 23, 2015
Integra Realty Resources (IRR), the largest independent leader in real estate market research and valuation, has released its Third Quarter 2015 Interest Rate Survey. The survey utilizes data collected from 64 diverse lenders to gauge current market conditions by investigating the determinants of interest rate spreads in commercial real estate across the United States.
By quantifying lending practices across property type, geographic location, loan size, and lender characteristics, the survey contains some outstanding highlights from data collected between Oct. 5 to Oct. 23 of this year. Respondents provided the maximum and minimum financing rate spread (in basis points) over the 10-year U.S. Treasury rate for the deals they had underwritten over the prior three-month period.
In looking at loan-to-value ratios, findings concluded that multi-tenant CBD office property loans are the lowest risk (except on deals with LTV of 76 percent to 85 percent). In the multifamily sector, the highest risk is attributed to Student Housing, with a 21 basis-point higher average than multifamily primary location assets. On deals financed with a 60 percent or higher loan to value, flex R&D space reportedly presents the highest risk to lenders. See the complete report at the jump.
Also, stay tuned for IRR’s Viewpoint, a comprehensive national CRE market intelligence report, coming in January 2016.