Austin property owners holding commercial real estate debt face a critical decision point in 2026. With nearly $936 billion in commercial real estate loans scheduled to mature nationally and the average rate on maturing debt jumping from 4.76% to 6.24%, refinancing strategies need to be precise, data-driven, and tailored to local market conditions. This guide covers everything you need to know about commercial refinance loans in Austin, from current rates and submarket dynamics to loan program options and step-by-step execution.
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Why Are Austin Property Owners Refinancing in 2026?
Austin sits at the intersection of two powerful forces: a maturing debt wave and a fundamentally strong local economy. The city topped the list of best large American cities for economic growth in 2025, with job growth of 0.9% from November 2024 to November 2025 outpacing both the Texas average (0.8%) and the national rate (0.5%). Venture capital funding in Austin reached a record $7.94 billion in 2025, a 116.4% increase from 2024.
But that economic strength exists alongside real refinancing pressure. Loans originated during the low-rate environment of 2020 to 2022 are now coming due, and borrowers are facing a fundamentally different cost of capital. The average interest rate on CRE loans issued in 2025 was 6.24%, compared to 4.76% on the older debt rolling off. For a $5 million loan, that rate gap translates to roughly $74,000 more in annual debt service.
Property owners in Austin are refinancing for several reasons: to lock in rates before further uncertainty, to pull equity from appreciated assets, to restructure balloon payments on maturing loans, and to reposition properties for the next market cycle. With Austin's population growing at 1.7% annually and tech employment representing 16.3% of all local jobs, the fundamental story supports long-term hold strategies that refinancing enables.
What Do Current Commercial Refinance Rates Look Like in Austin?
As of February 2026, commercial mortgage rates in Texas start as low as 5.18%, with Austin-specific rates recorded at 5.07% in recent months. The broader range spans from 4.73% on the low end to 12.75% depending on property type, leverage, and borrower profile.
The Federal Reserve held the federal funds rate at 3.50% to 3.75% at its January 28, 2026 meeting, pausing after three consecutive rate cuts in late 2025. The 10-year Treasury yield sits at approximately 4.26%, which anchors long-term fixed-rate commercial loans.
For Austin borrowers, the rate you receive depends heavily on the loan program, property type, and deal structure. Agency loans (Fannie Mae and Freddie Mac) for multifamily properties offer the most competitive pricing, typically in the 5.0% to 5.75% range. CMBS loans for stabilized commercial properties run from 5.5% to 7.0%. SBA 504 loans for owner-occupied properties feature below-market fixed rates for up to 25 years. Bridge loans for transitional properties range from 7.5% to 12.0% depending on the business plan.
Lenders remain selective, with transactions showing strong cash flow and conservative leverage closing efficiently, while marginal deals continue to face headwinds. The key metric lenders focus on is debt service coverage ratio (DSCR), with most requiring 1.25x or higher for conventional refinancing.
How Does the $936 Billion Maturity Wall Affect Austin?
The CRE maturity wall is not an abstract national statistic for Austin property owners. Nearly $936 billion in commercial real estate loans are scheduled to mature in 2026, pushing the industry's debt peak out two years as borrowers and lenders extended terms to avoid forced sales in a high-rate environment. Over $1.5 trillion in total CRE debt will come due by the end of 2026.
For Austin specifically, the maturity wall creates both pressure and opportunity. On the pressure side, owners with maturing loans face smaller refinancing proceeds, larger monthly payments, or the need to inject fresh equity. In some cases, property valuations have declined enough that traditional refinancing is no longer possible without restructuring.
On the opportunity side, the maturity wall is creating motivated sellers and discounted acquisition opportunities that can be financed through bridge loan programs. Austin's strong economic fundamentals mean that well-located, well-operated properties retain refinancing viability even in a tighter lending environment.
The borrowers most exposed in Austin's market are those who acquired or refinanced at peak valuations in 2021 and 2022 with floating-rate debt and now face both higher rates and potentially lower appraised values. Office properties carry the highest risk, given Austin's elevated vacancy rates.
Which Austin Submarkets Offer the Strongest Refinancing Fundamentals?
Not all Austin submarkets carry equal weight in a lender's underwriting analysis. The city's commercial real estate landscape varies significantly by location and property type, and understanding submarket dynamics is essential for a successful refinance.
Downtown Austin (CBD) commands the highest rental rates and attracts top-tier tenants in law, finance, and technology. Despite elevated office vacancy, the CBD's density of amenities and continued development activity supports strong valuations for multifamily and mixed-use assets. Lenders view stabilized downtown properties favorably for conventional refinancing.
The Domain and North Austin represent one of the metro's fastest-growing regions. This high-end mixed-use corridor features significant retail, residential, and office components. The area's momentum, driven by major corporate tenants and continued in-migration, provides strong fundamentals for refinancing industrial, retail, and multifamily properties.
South Congress and East Austin continue to see rising property values driven by a mix of creative office, retail, and residential development. These neighborhoods attract a younger, affluent demographic, and the shift toward more commercial development makes them increasingly attractive to lenders looking at long-term appreciation potential.
Round Rock and North Metro Corridors benefit from suburban migration patterns and corporate relocations. Industrial and flex properties in these areas carry lower vacancy rates and more predictable cash flows, making them strong candidates for conventional refinancing.
What Loan Programs Are Available for Austin Commercial Refinances?
Austin borrowers have access to a full spectrum of commercial refinancing programs, each designed for specific property types and borrower situations. Choosing the right program can mean the difference between a 5.0% rate and an 8.0% rate on the same property.
CMBS (Commercial Mortgage-Backed Securities) Loans offer non-recourse financing with a strong focus on the property's income rather than the borrower's personal credit. These loans work well for stabilized retail centers, office buildings, and industrial properties in Austin. Typical terms include 5 to 10 year fixed rates, up to 75% LTV, and a minimum DSCR of 1.25x.
Agency Loans (Fannie Mae and Freddie Mac) remain the gold standard for multifamily refinancing. With Austin's apartment market showing signs of stabilization after a period of elevated supply, agency lenders are actively quoting competitive rates for well-occupied properties. LTVs reach up to 80%, and loan terms extend to 30 years.
SBA 504 Loans serve owner-occupied commercial properties and represent one of the most overlooked refinancing tools in Austin's market. These government-backed loans offer up to 90% LTV, below-market fixed rates for 25 years, and can include cash-out proceeds for business expansion. They are ideal for owner-operators of retail, office, industrial, and specialty properties.
Bank and Credit Union Loans provide relationship-based financing with flexible terms. Austin's strong community banking sector offers competitive options for borrowers with established local relationships and strong deposit accounts.
Life Company Loans target the lowest-risk properties and offer the most competitive rates, typically for Class A assets with long-term, creditworthy tenants. These loans feature low leverage (55% to 65% LTV) but the best pricing in the market.
How Do Austin's Property-Type Fundamentals Affect Refinancing?
Lenders underwrite refinancing based on the specific property type's performance metrics. Here is how each major commercial asset class is performing in Austin as of early 2026.
Multifamily: Austin's apartment market has experienced significant supply-side pressure, with vacancy reaching 10.01% for two-bedroom units, the highest in over 20 years. Average rents have declined 19.9% from the August 2022 peak. However, Q2 2025 absorption reached 7,142 units, nearly matching deliveries, and new construction starts are slowing. This signals a market bottoming that should support rent firming through 2026. Lenders are cautious but still lending on well-located multifamily with occupancy above 90%.
Industrial: The industrial market recorded a 21.9% vacancy rate in Q4 2025, up 860 basis points year over year. This elevated vacancy is driven by a wave of speculative deliveries meeting moderated demand. Despite the near-term softness, Austin's industrial fundamentals remain sound given the region's population and economic growth. Refinancing is achievable for properties with long-term leases and creditworthy tenants.
Office: Austin's office market faces the steepest challenges, with vacancy rates near 24% to 25% and continued negative absorption in some quarters. Refinancing office properties requires creative structuring, such as bridge-to-permanent strategies or partial recourse arrangements. Lenders are most receptive to Class A buildings with strong tenant rosters.
Retail: Austin's retail market stands out as the strongest performer, with vacancy rates between 3% and 5%. Neighborhood centers and grocery-anchored properties in high-traffic Austin submarkets are among the easiest commercial assets to refinance, with competitive rates and favorable terms.
What Steps Should Austin Property Owners Take to Refinance Successfully?
A successful commercial refinance in Austin requires preparation, timing, and the right advisory team. Here is a proven process that accounts for current market conditions.
Start by gathering your current financial documentation at least 6 to 9 months before your loan maturity date. Lenders want to see trailing 12-month operating statements, a current rent roll, tax returns for the past two years, and a property condition assessment. Having these materials organized from the beginning speeds up the process significantly.
Next, get a realistic property valuation. In Austin's current market, appraisal values may come in lower than expected, particularly for multifamily and office properties. Understanding your likely appraised value helps you set realistic expectations for proceeds and terms.
Then, engage a commercial mortgage broker or advisor who knows the Austin market and has active relationships with multiple lending sources. The difference between lenders can be 100 to 200 basis points on rate and significant variation on terms like prepayment penalties, reserve requirements, and recourse.
Use the commercial mortgage calculator to model different scenarios before committing to a loan structure. Compare total cost of capital across programs, not just the headline rate.
How Does Austin Compare to Other Texas Markets for Refinancing?
Austin's refinancing landscape differs from other major Texas metros in important ways. Understanding these differences helps borrowers benchmark their expectations and identify whether Austin-specific strategies are needed.
Compared to Dallas-Fort Worth, Austin has higher office vacancy but stronger population growth momentum. Houston offers lower cap rates for industrial properties but faces energy-sector cyclicality that Austin avoids. San Antonio provides more affordable entry points but lacks Austin's tech-driven demand drivers.
For lenders, Austin's key advantages include a diversified economic base anchored by technology (16.3% of jobs), strong in-migration trends (1.7% annual population growth), a young and educated workforce, and a track record of venture capital investment ($7.94 billion in 2025). These factors support long-term property value appreciation even during periods of near-term market softness.
The primary challenges lenders weigh for Austin include elevated apartment supply, rising office vacancy, and the potential for tech-sector volatility. However, with patent activity totaling 4,442 in 2025 and Austin's economy continuing to diversify beyond pure technology, most lenders view the metro favorably for long-term commercial lending.
For a comprehensive look at all commercial lending options in Austin, including acquisition and construction financing, review our full Austin market guide.
What Strategies Help Austin Borrowers Navigate Refinancing Challenges?
Borrowers facing tight underwriting or unfavorable loan-to-value ratios have several strategies available in Austin's market.
Cash-in Refinancing: Injecting additional equity to bring the LTV down to a level that qualifies for conventional financing. While this requires capital, it can secure significantly better rates and terms than alternative options.
Bridge-to-Permanent: For properties that need occupancy improvement or capital expenditure before they qualify for permanent financing, a short-term bridge loan (12 to 36 months) followed by a permanent refinance can be the most cost-effective path. Austin's improving absorption trends make this strategy particularly viable for multifamily and industrial assets.
Partial Recourse: Offering personal recourse on a portion of the loan can unlock better pricing and higher proceeds from bank lenders who might otherwise decline a non-recourse request.
SBA 504 Conversion: Owner-occupants who originally financed with conventional loans may qualify for SBA 504 refinancing, which can reduce rates, extend terms, and provide cash-out proceeds for business investment.
Loan Assumption: In some cases, assuming an existing low-rate loan on a property being acquired is more advantageous than originating new debt. CMBS loan assumptions are becoming increasingly common in Austin's market.
What Should Austin Borrowers Watch for in 2026 and Beyond?
The Austin commercial refinancing outlook for the remainder of 2026 hinges on several factors. If the Federal Reserve continues gradual rate cuts, further easing in long-term fixed rates and a continued return of bank and life company capital can be expected. Agency lenders including Fannie Mae and Freddie Mac remain active and are expected to increase volume.
Austin's apartment market is projected to see supply-demand balance improve as new construction starts slow and in-migration continues. Rents have fallen for 10 consecutive quarters, but falling construction activity and projected demand growth in 2026 could finally tip the balance toward stabilization. This improving trajectory supports stronger underwriting for multifamily refinancing as the year progresses.
The office sector will likely remain challenged through at least 2026, with recovery dependent on return-to-office trends and potential conversions reducing inventory. Retail and industrial fundamentals are expected to hold steady or improve, providing solid refinancing conditions for those property types.
For borrowers with loans maturing in 2026 or 2027, the message is clear: start the refinancing process early, explore multiple lending sources, and work with advisors who understand Austin's submarket dynamics. The cost of waiting or going with the first lender who responds can be measured in hundreds of thousands of dollars over the life of a loan.
Ready to explore your refinancing options? Contact our team for a free consultation on commercial refinance loans in Austin.
Frequently Asked Questions
What is the minimum credit score needed for a commercial refinance loan in Austin?
Most conventional commercial lenders require a minimum credit score of 680 for the borrowing entity's principals. However, SBA 504 programs may consider scores as low as 650 with strong compensating factors such as high property cash flow or significant equity. CMBS loans focus primarily on property income rather than borrower credit, making them an option for borrowers with credit challenges but strong-performing assets.
How long does the commercial refinancing process typically take in Austin?
A straightforward commercial refinance in Austin typically closes within 45 to 90 days from application to funding. CMBS loans tend toward the longer end (75 to 90 days) due to securitization requirements, while bank loans and credit union financing can close in as few as 30 to 45 days for existing customers. SBA 504 refinances typically require 60 to 90 days. Starting the process at least 6 months before loan maturity provides adequate time to shop lenders and negotiate terms.
Can I pull cash out during a commercial refinance in Austin?
Yes, cash-out refinancing is available through most commercial loan programs in Austin. CMBS loans allow cash-out up to 75% LTV. Agency loans (Fannie Mae and Freddie Mac) permit cash-out up to 75% to 80% LTV for multifamily properties. SBA 504 loans allow cash-out for business operating expenses and expansion. The amount of cash available depends on the appraised value of the property minus the existing loan balance and required equity retention.
What are the typical closing costs for a commercial refinance in Austin?
Commercial refinancing closing costs in Austin typically range from 1% to 3% of the loan amount. This includes an origination fee (0.5% to 1.5%), appraisal ($3,000 to $10,000 depending on property size and type), environmental assessment ($2,000 to $5,000), legal fees ($5,000 to $15,000), title insurance, and recording fees. CMBS loans may also include rating agency fees. Some lenders offer reduced or waived origination fees for competitive deals.
Should I choose a fixed rate or floating rate for my Austin commercial refinance?
In the current rate environment, most Austin borrowers are choosing fixed-rate financing to lock in predictability. With the Federal Reserve holding rates at 3.50% to 3.75% and the possibility of further cuts, floating-rate loans may seem attractive. However, the risk of rate volatility and the relatively narrow spread between fixed and floating rates make fixed-rate loans the safer choice for most hold strategies. Floating-rate loans still make sense for short-term holds (under 3 years) or properties undergoing active value-add programs where an early prepayment is likely.
What happens if my Austin property does not appraise high enough for refinancing?
If your property appraises below the value needed to refinance at your desired leverage, you have several options. You can bring additional cash to closing to reduce the LTV. You can seek a lender willing to lend at a higher LTV with partial recourse. You can pursue a bridge loan that considers the property's future stabilized value rather than its current as-is value. In some cases, ordering a second appraisal from a different firm familiar with Austin's submarkets can yield a more favorable result, particularly if the first appraiser used inappropriate comparable properties.