Refinancing Commercial Real Estate in Texas
Refinancing a commercial property can lower your interest rate, extend your amortization, pull cash out of built-up equity, or replace a short-term bridge loan with permanent financing. In Texas — where commercial real estate values have risen significantly in most markets — refinancing is one of the most powerful tools available to property owners.
Reasons to Refinance a Commercial Property
- Rate and term refinance: Replace a high-rate loan with a lower-rate loan — reduces monthly debt service and improves cash flow
- Cash-out refinance: Pull equity from an appreciated property to fund the next acquisition, renovation, or business need
- Maturity refinance: Your existing loan is coming due (balloon payment) and needs to be replaced with new financing
- Bridge loan exit: Your short-term hard money or bridge loan term is ending — refinance into permanent long-term debt
- Consolidation: Multiple small loans on different properties consolidated into a single portfolio loan
- Improve terms: Move from recourse to non-recourse, from variable to fixed, or from a 20-year to 30-year amortization
Cash-Out Refinance: How Much Equity Can You Access?
The amount you can pull out depends on the lender’s maximum LTV and your property’s current appraised value:
- Conventional commercial refi: Lend up to 70–75% of appraised value; cash-out is the difference between the new loan and your existing balance
- Hard money refi: Lend up to 60–65% of appraised value; faster close, higher rate — good when you need cash quickly
- SBA 7(a) refi: Can refinance existing commercial debt AND pull cash out for business purposes — up to $5M total
Example: Property appraised at $2,000,000. Existing loan balance: $800,000. At 70% LTV, you can refinance up to $1,400,000 — pulling out $600,000 in cash (minus closing costs).
Rate and Term Refinance: When It Makes Sense
A rate-and-term refi only makes sense if the savings justify the closing costs. A rough rule of thumb:
- If you can reduce your rate by 0.75% or more AND you plan to hold the property for at least 2 to 3 more years, refinancing usually pencils out
- Factor in prepayment penalties on your existing loan — step-down prepayment or defeasance can be significant on CMBS loans
- Check your lock-out period — some loans prohibit refinancing for the first 2 to 5 years
Bridge Loan Exit Refinance
If you used a bridge loan or hard money loan to acquire or renovate a property, the exit refinance is the end game. Keys to a successful exit:
- Occupancy: Get to 85–90%+ occupancy — this is what conventional lenders need to see
- Seasoning: Most lenders want 6 to 12 months of operating history at stabilized occupancy
- Documentation: 12 months of rent rolls, operating statements, and bank statements
- Appraisal: A fresh appraisal reflecting stabilized value — often significantly higher than what you paid
Commercial Refinance Loan Terms
- Conventional rate/term refi: LTV up to 70–75%, 5–10 year fixed, 25–30 year amortization
- Cash-out refi: LTV up to 65–70%, slightly higher rate than rate/term
- Hard money refi: LTV up to 60–65%, 9–13%, 6–24 month term — fast close
- SBA 7(a) refi: Up to $5M, 25-year term, 10–20% equity required
- CMBS refi: Non-recourse, 10-year fixed, LTV up to 70–75% — for larger stabilized assets
Refinance Your Texas Commercial Property
Whether you’re pulling cash out, replacing a maturing loan, or exiting a bridge, we structure commercial refinances across all Texas markets and property types. Submit your property details and current loan information and we’ll show you what’s possible within 24 hours.
Apply Now — Commercial Refinance Pre-Qualification