May 18, 2017
Integra Realty Resources (IRR) released the results of its Q1 2017 interest rate survey. The survey of 164 CRE lenders and underwriters provides an accurate gauge of current market conditions by looking at what’s causing interest rate spreads across the U.S. CRE sector.
The survey assesses lending practices based on CRE property type, loan size, geographic location, and how characteristics of the lender affected the financing of CRE assets nationally.
Key IRR interest rate survey findings:
- Among multi-tenant deals with a LTV greater than 60%, IRR witnessed contrary interest rate spread changes for CBD and suburban assets
- Relatively modest interest rate spread compression over the past six months for both primary and secondary locations
- The Power Center is the only asset class to face compressed interest rate spreads over the past six months on deals with an LTV of 75% or lower
- Interest rate spreads across all industrial asset classes compressed from highs in Q3 2016
- 62% of lenders are anticipating a continued increase in interest rate spreads for full service properties
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