Daily I am asked “Should I refinance my commercial property now or should I wait?”

Since the election, most commercial lenders have raised their rates from .4 to .6%. This was in line with the increase in treasury yields, to which commercial real estate loans rates are closely related.

The Federal Reserve is signaling they may raise their benchmark rate before year-end due to strong unemployment and GNP numbers. This may not translate into a similar increase in commercial real estate loan rates, but in opinion of many, it makes it less likely rates will drop back down to pre-election levels.

We may be at the end of a period of exceptionally low rates on commercial real estate loans and entering a period of what are very low rates historically.

So back to question, “Refinance now or wait?” If refinancing will lower your monthly payment, and/or you have a variable rate loan, now remains a good time to refinance. If you are delaying refinancing, hoping that rates will drop back down to the exceptionally low levels seen over the last few years, you may be disappointed. I could be wrong, but that is my opinion and that of most bankers I speak with.