Permanent Loans in Los Angeles, CA

Permanent Financing for Los Angeles Commercial Properties

Typical terms for stabilized Los Angeles properties. Each capital source trades rate, leverage, recourse and prepayment differently; the table in the next section shows the differences.

Who Is Lending on Stabilized Los Angeles Property

Five kinds of lenders write permanent loans in Los Angeles. We run most assignments to two or three of them at once so the borrower sees the real trade-off rather than one lender’s view of it.

Indicative as of November 2026 for stabilized Los Angeles properties; subject to property, sponsorship and lender underwriting. Fixed rates price off the 5-, 7- and 10-year Treasury plus spread. See today’s benchmarks and rate table →

How we read the market right now

Life insurance companies are the best execution for Los Angeles industrial, grocery-anchored retail and well-located net lease, and for newer multifamily at moderate leverage. They want low leverage and clean collateral and in return give the lowest fixed rates and the longest terms. They will not stretch, and most want $5MM or more.

CMBS conduits are the deepest source of non-recourse money for cash-flowing retail, industrial and office in Los Angeles at 65% to 70% leverage, often with full-term interest-only. Our three largest LA permanent closings, $31.4M in Little Tokyo and $27.5M and $28M in Vernon, were conduit or conduit-style executions. The cost is structure: lockboxes, cash management, reserves and defeasance.

Banks and credit unions do the most volume in Los Angeles between $1MM and $15MM. They are the only option for owner-occupied buildings and the most flexible on prepayment. Several of our LA credit union closings came with hybrid-rate structures (fixed for 5 or 7 years, then a capped reset) and pricing tied to deposits. Expect personal guarantees.

Fannie Mae and Freddie Mac are usually the most competitive source for stabilized Los Angeles apartment buildings with five or more units, including buildings under the Rent Stabilization Ordinance, at up to 75% to 80% leverage and non-recourse. HUD 223(f) gives the lowest rate and a 35-year fully amortizing loan for owners who will hold and can wait six months or more to close.

How Permanent Lenders Underwrite Los Angeles Deals

Leverage is set by cash flow, not by the LTV in the term sheet

Los Angeles cap rates sit below most of the country. When a property trades at a 5% cap and debt costs 6.5%, a 1.25x debt service coverage test caps the loan well below 70% of value, often at 55% to 62%. Lenders also test debt yield (net operating income divided by loan amount), which CMBS desks want at 8% to 9% or better. We size every request on all three tests and tell the borrower which one controls, because it changes what to negotiate: a longer amortization or interest-only period helps a DSCR-bound deal, while nothing but more equity helps a debt-yield-bound one.

Measure ULA pushed owners from selling to refinancing

Since April 2023 the City of Los Angeles has charged a 4% transfer tax on sales above roughly $5 million and 5.5% above roughly $10 million, on the full price, with thresholds indexed each year. The tax does not apply to a refinance. The result is a steady stream of cash-out permanent loans from owners who would otherwise have sold, and lenders in Los Angeles now underwrite cash-out requests as routine as long as the property supports the debt. The Sherman Oaks creative office refinance below was a cash-out at 55% LTV; the four-property Beverly Hills and Los Angeles portfolio was a hold-and-recapitalize rather than a sale.

Rent-stabilized apartments

Most Los Angeles apartment buildings built before October 1978 fall under the city’s Rent Stabilization Ordinance, which limits annual increases on occupied units. Lenders underwrite these buildings to in-place rents with little growth, which lowers proceeds versus market-rent underwriting but also makes the income predictable. Agency lenders treat regulated rent rolls as stable and are often the best source. We cover the financing side in detail on financing rent-controlled apartments in Los Angeles.

Seismic, retrofit and insurance

Life companies and CMBS lenders order a seismic probable maximum loss study on Los Angeles collateral. A PML above about 20% means earthquake insurance or a reserve, which can move pricing more than the rate itself. Soft-story wood-frame buildings should have their retrofit completed and certified before the loan application; banks will ask for the compliance letter. Older concrete tilt-up industrial buildings in Vernon, Commerce and the South Bay are routinely financed, but the engineer’s report should be in hand early.

Property taxes on acquisitions

Under Proposition 13 a sale resets the assessed value to the purchase price. On an acquisition loan every lender underwrites the reassessed tax bill, not the seller’s. On a refinance there is no reassessment, which is one reason refinancing a long-held Los Angeles property often supports more debt than the same property would after a sale.

What a Los Angeles permanent loan needs to close

Three years of operating statements and a current rent roll; leases and estoppels for commercial tenants; the title report with any recorded restrictions; the property condition, environmental and seismic reports (ordered by the lender); and a sponsor package with a schedule of real estate, liquidity and credit. Bank and credit union loans close in 45 to 60 days, CMBS and life company loans in 60 to 75, agency in 60 to 90. The most common Los Angeles delays are slow tenant estoppels, retrofit documentation and clearing title on properties held in family trusts for decades.

Size Your Los Angeles Permanent Loan

Run the three tests lenders apply before you call. These are the same tools we use for a first sizing.