The CRED iQ research team focused upon the underwriting of the latest market transactions. We wanted to understand they key loan metrics across this universe to get a real-time sense of the new issues marketplace.
CRED iQ analyzed underwriting metrics for the 28 CMBS conduit issuances in 2024. This analysis builds upon our April report that covered the 8 conduit transactions that were issued in Q1.
This analysis examined interest rates ranges and averages over the past twelve months.
Interest Rate Trending
Over the past 12 months, average interest rates peaked/spiked in November of 2023, after which we start to see a more downward trend leading up to today.
By Property Type
- Office saw the second highest average interest rate for all loans at 7.16%. The Office segment operated in an interest rate range between 4.84% and 8.44%.
- Multifamily Interest rates ranged from 4.68% to 8.33% with an average of 6.68%.
- Retail interest rates ranged from 5.18% to 9.04% with an average of 6.96%.
- Hotels had the highest average interest rate (7.48%).
- Self-storage had the lowest average interest rate at 6.6% and operated at the lowest range of all property types (4.5% to 7.99%)
Notable Example
The Piazza is a 332-unit, multifamily complex in the Northern Liberties submarket of Philadelphia. The asset is backed by a $108.6 million ($382,530/unit) senior loan plus an $18.5 million mezzanine loan for a total debt package of $127 million. Originated in August 2024, the interest-only loan has a 5.91% interest rate and is scheduled to mature in August 2029. The previous loan was packaged into a CRE CLO in May 2021 that had a total loan amount of $134.9 million. In order to refinance this loan the borrower contributed $22.5 million in cash equity.
The mid-rise complex was constructed in 2006 and most recently renovated in 2019. The former WeWork space (20,951 SF) at the property is in the process of being converted to 16 additional units that are expected to be completed by March 2025. The property was valued as-is at $155.8 million ($469,277/unit) in May 2024. At underwriting, the asset was 90.7% occupied and had a DSCR of 1.35.
Prior CRE CLO Loan (May 2021)
New CMBS Conduit Loan (Aug 2024)
About CRED iQ
CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.
With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.
