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The commercial real estate (CRE) market is always shifting, and so are loan rates. For investors, developers, and business owners, understanding commercial real estate loan rates in 2025 is crucial for making smart financing decisions.
In this article, we’ll cover:
- Current trends in CRE loan rates
- Factors influencing interest rates in 2025
- Types of commercial real estate loans available
- Strategies to secure the best rate
Current Commercial Real Estate Loan Rate Trends
As of 2025, commercial mortgage rates generally range from 6% to 11%, depending on the loan type, borrower profile, and property class.
- SBA 504 and 7(a) Loans → 6% – 8%
- Traditional Bank CRE Loans → 7% – 9%
- Bridge Loans → 9% – 12%
- Private Lender/Hard Money Loans → 10% – 14%
Rates remain higher than pre-2020 levels due to inflation, interest rate policies, and tighter credit conditions, but competition among lenders is slowly creating opportunities for qualified borrowers.
Factors Influencing CRE Loan Rates in 2025
- Federal Reserve Policies
Interest rate hikes or cuts directly affect CRE loan pricing. The Fed’s focus on controlling inflation in 2025 plays a big role in rate movement. - Property Type & Location
Loans for multifamily properties often have lower rates than riskier sectors like hospitality or retail. - Loan-to-Value Ratio (LTV)
The lower your LTV, the better rate you’re likely to secure. - Borrower’s Credit & Financials
Strong credit scores and stable cash flow help reduce interest costs. - Loan Type & Term
Short-term bridge loans tend to have higher rates than long-term SBA or traditional loans.
Types of Commercial Real Estate Loans in 2025
- SBA 504 Loans – Best for purchasing owner-occupied real estate with fixed, long-term rates.
- SBA 7(a) Loans – Flexible, great for smaller CRE projects.
- Traditional Bank Loans – Strong credit and financials required, moderate rates.
- Bridge Loans – Short-term financing with higher rates; ideal for property repositioning.
- Private Lender/Hard Money Loans – Fast funding but higher costs; used for opportunistic deals.
2025 Market Outlook: What Borrowers Should Expect
- Rates may stay elevated compared to pre-2020, but slight decreases are possible if inflation stabilizes.
- Banks are tightening lending standards, making alternative lenders (like private debt funds) more attractive.
- Demand for multifamily and industrial properties will likely keep financing competitive in those sectors.
- Mixed-use and retail properties may face higher rates due to risk perception.
How to Secure the Best Commercial Real Estate Loan Rate
Improve Your Credit Profile – Higher credit scores = lower interest rates.
Reduce Loan-to-Value Ratio – Larger down payments help secure better terms.
Compare Multiple Lenders – Don’t settle; shop between banks, SBA programs, and private lenders.
Lock in Fixed Rates – Protect against future rate hikes by choosing fixed-rate loans.
Work with a Financing Partner – A financial partner like Chasewood Financial can help structure deals for optimal rates.
Real-World Example
- Investor A: Purchases a $2M office property with an SBA 504 loan → 6.5% fixed, 25-year term.
- Investor B: Uses a bridge loan for a $5M retail property renovation → 11% rate, 18-month term.
The difference in loan type and property class shows how rates vary significantly in 2025.
FAQs
Q1: Are commercial real estate rates going down in 2025?
Possibly, but much depends on Federal Reserve policy and inflation trends.
Q2: Can I refinance my CRE loan in 2025?
Yes—many investors are refinancing high-interest 2023–2024 loans if better terms become available.
Q3: Which CRE loan has the lowest rates?
SBA 504 loans generally offer the lowest, most stable long-term rates.
Why Choose Chasewood Financial for CRE Financing?
At Chasewood Financial, we help clients navigate the complex CRE financing market by offering:
Access to SBA, bank, and private loan programs
Expert guidance on structuring deals
Competitive rates tailored to your business goals
Contact us today to explore your options for commercial real estate loans in 2025.
