El Paso commercial property owners face a pivotal refinancing environment in 2026. With approximately $936 billion in commercial real estate loans maturing nationally and the average rate on new debt running around 6.24% compared to 4.76% on expiring loans, the cost of capital has shifted significantly. For El Paso borrowers, the combination of border economy strength, Fort Bliss employment stability, and Texas's business-friendly tax environment creates refinancing conditions that differ meaningfully from national trends. This guide covers everything property owners need to know about commercial refinance loans in El Paso, from current rates and submarket analysis to loan program options and execution strategies.
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Why Are El Paso Property Owners Refinancing in 2026?
El Paso's commercial real estate market operates within a unique economic framework. The city's position on the U.S.-Mexico border, directly across from Ciudad Juarez, generates roughly $100 billion in annual cross-border trade that supports logistics, manufacturing, and professional services employment. Fort Bliss, one of the largest U.S. Army installations in the country, directly supports more than 40,000 military personnel and civilian employees. UTEP anchors the education and research sectors, awarding approximately 44% of all degrees in the region.
These demand drivers create stable cash flows for commercial properties that support refinancing even in a higher-rate environment. Property owners in El Paso are refinancing for several reasons in 2026: to lock in rates before potential volatility, to restructure balloon payments on maturing loans, to pull equity from appreciated assets, and to reposition properties for the next market cycle.
The maturity wall is the most urgent catalyst. Loans originated during the low-rate period of 2020 to 2022 are now coming due, and borrowers face a fundamentally different cost of capital. For a $3 million loan, the rate gap between maturing debt at 4.76% and new debt at 6.24% translates to roughly $44,400 more in annual debt service. That increase demands careful planning and strategic loan selection.
Texas's lack of a state income tax and El Paso's cost of living, which runs approximately 15% below the national average, provide additional advantages that support property operations and make refinancing more viable than in higher-cost markets.
What Do Current Commercial Refinance Rates Look Like in El Paso?
As of February 2026, commercial mortgage rates in Texas start as low as 5.18%, with El Paso-specific rates generally ranging from 5.25% to 8.0% depending on property type, loan program, and borrower profile. The Federal Reserve held the federal funds rate at 3.50% to 3.75% at its January 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 El Paso borrowers, rates vary significantly by loan program. 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 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 11.0% depending on the business plan and exit strategy.
Lenders remain selective in El Paso's market, with transactions showing strong cash flow and conservative leverage closing efficiently while marginal deals face headwinds. The key metric lenders focus on is debt service coverage ratio (DSCR), with most requiring 1.25x or higher for conventional refinancing. Use the DSCR calculator to model your property's cash flow against potential loan payments.
How Does the National Maturity Wall Affect El Paso Borrowers?
The CRE maturity wall is not an abstract national statistic for El Paso property owners. Nearly $936 billion in commercial real estate loans are scheduled to mature in 2026, with over $1.5 trillion in total CRE debt coming due by year-end. This volume results from borrowers and lenders extending terms during the high-rate period to avoid forced sales.
For El Paso specifically, the maturity wall creates both pressure and opportunity. On the pressure side, owners with maturing loans face potentially smaller refinancing proceeds, larger monthly payments, or the need to inject fresh equity. Properties that were financed at peak valuations in 2021 and 2022 with floating-rate debt face the greatest exposure.
On the opportunity side, the maturity wall is creating motivated sellers and discounted acquisition opportunities that can be financed through bridge loan programs. El Paso's relatively stable property values, supported by military and cross-border demand, mean that fewer properties here face the severe valuation declines seen in some larger metros.
The borrowers most exposed in El Paso are those holding office properties with elevated vacancy and those who acquired assets with aggressive leverage during the low-rate window. Industrial and retail properties, which benefit from cross-border trade and the Fort Bliss consumer base, face less refinancing pressure.
Which El Paso Submarkets Offer the Strongest Refinancing Fundamentals?
Not all El Paso submarkets carry equal weight in a lender's underwriting analysis. The city stretches approximately 30 miles along the Rio Grande, creating distinct commercial corridors with varying property performance.
Downtown and Union Plaza have seen significant investment in recent years, including the $85 million WestStar Tower, the $72 million La Nube cultural center, and the $15 million Mexican American Cultural Center. The Union Plaza Redevelopment, offering 17 city-owned parcels for adaptive reuse, signals continued momentum. Lenders view stabilized downtown properties favorably for refinancing, particularly those near completed anchor projects.
Northeast (Fort Bliss Corridor) benefits from the military base's stable employment and consumer spending. Retail centers, multifamily properties, and service-oriented commercial buildings in this submarket enjoy consistent occupancy driven by military personnel and their families. Lenders view this corridor as low-risk for refinancing.
Cielo Vista and I-10 East sit along the primary commercial corridor and benefit from cross-border shopping traffic from Juarez. Retail and industrial properties here generate strong revenue supported by both domestic consumers and Mexican nationals crossing for shopping and services.
UTEP and Cincinnati District benefit from the university's enrollment of roughly 24,000 students and its research enterprise. Multifamily and mixed-use properties near campus enjoy stable demand, making them strong refinancing candidates.
Westside and Upper Valley represent El Paso's higher-income corridor with professional office, medical, and upscale retail properties that attract quality tenants and support solid underwriting metrics.
What Loan Programs Are Available for El Paso Commercial Refinances?
El Paso borrowers have access to a full spectrum of commercial refinancing programs. 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 focused on property income rather than borrower credit. These loans work well for stabilized retail centers, office buildings, and industrial properties. 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 El Paso's apartment market supported by Fort Bliss demand and a cost of living that attracts renters, agency lenders actively quote competitive rates. 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 underutilized refinancing tools in El Paso. These government-backed loans offer up to 90% LTV, below-market fixed rates for 25 years, and 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. El Paso's community banking sector, including institutions familiar with border-market dynamics, offers competitive options for established local borrowers.
DSCR Loans focus purely on property income rather than borrower tax returns, making them attractive for investors with complex financial situations or multiple properties.
Life Company Loans target the lowest-risk properties with the most competitive rates, typically for Class A assets with long-term, creditworthy tenants at 55% to 65% LTV.
How Do El Paso's Property-Type Fundamentals Affect Refinancing?
Lenders underwrite refinancing based on specific property-type performance metrics. Here is how each major commercial asset class performs in El Paso as of early 2026.
Industrial: El Paso's industrial market is heavily influenced by cross-border trade and logistics. The I-10 corridor and proximity to international bridges support warehouse and distribution facilities. While the broader Texas industrial market saw vacancy rise to around 15.7% in some metros, El Paso's industrial properties serving the maquiladora supply chain and nearshoring trends maintain stronger occupancy. Properties with long-term leases and creditworthy logistics tenants refinance most competitively.
Retail: El Paso's retail sector benefits from the unique dynamic of cross-border consumer traffic. Mexican nationals crossing from Juarez for shopping and services provide an additional demand layer that most U.S. markets lack. Neighborhood centers and grocery-anchored properties along major commercial corridors perform well and attract favorable refinancing terms.
Multifamily: El Paso's apartment market is supported by Fort Bliss military demand, UTEP student housing needs, and a growing healthcare workforce. Unlike some overbuilt Texas metros, El Paso has not experienced the same level of supply-side pressure, keeping vacancy rates more manageable. Agency refinancing remains available for well-occupied properties.
Office: The office sector faces challenges nationally, and El Paso is not immune. However, the city's office market is smaller and less exposed to the remote-work disruption that has hit larger tech-focused metros. Properties with medical, government, or professional services tenants maintain stronger occupancy and refinancing viability.
What Steps Should El Paso Property Owners Take to Refinance Successfully?
A successful commercial refinance in El Paso requires preparation, timing, and the right advisory team. Here is a proven process for current market conditions.
Start by gathering 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 accelerates the process.
Next, get a realistic property valuation. In the current market, appraisal values may come in lower than expected, particularly for office properties. Understanding your likely appraised value helps set realistic expectations for proceeds and terms. Use the commercial mortgage calculator to model different scenarios.
Then, engage a commercial mortgage broker or advisor who knows El Paso's 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 including prepayment penalties, reserve requirements, and recourse provisions.
Finally, submit to multiple lenders simultaneously to create competition. Plan for the full process to take 45 to 90 days from application to closing for stabilized properties, and longer for complex or transitional situations.
How Does the Border Economy Strengthen El Paso's Refinancing Position?
El Paso's border economy creates refinancing advantages that most U.S. markets do not offer. Understanding these dynamics helps borrowers and lenders evaluate properties more accurately.
The El Paso-Juarez metropolitan area functions as a single integrated economic zone with a combined population of roughly 2.5 million. The maquiladora industry in Juarez employs hundreds of thousands of workers, and many of these operations require management, logistics, and support services on the El Paso side. This cross-border employment creates steady demand for commercial space that supports property cash flows and refinancing underwriting.
Cross-border retail spending adds another income stream for commercial properties. Mexican nationals regularly cross into El Paso for shopping, dining, and medical services, generating revenue for retail and commercial properties along the border-crossing corridors.
The 250-acre Advanced Manufacturing District, expected to create approximately 17,000 jobs, positions El Paso for long-term demand growth. Nearshoring trends, which are shifting manufacturing from Asia to Mexico, benefit El Paso as a primary logistics and management gateway. These structural trends support the long-term property value appreciation that lenders evaluate when underwriting refinance loans.
For experienced border-market lenders, these cross-border dynamics represent a diversification benefit rather than a risk factor, as the multiple demand sources create more resilient occupancy patterns.
How Does El Paso Compare to Other Texas Markets for Refinancing?
El Paso's refinancing landscape differs from other major Texas metros in important ways. Understanding these differences helps borrowers benchmark expectations.
Compared to Dallas-Fort Worth and Houston, El Paso has a smaller commercial market but stronger employment stability driven by the military and cross-border trade. These sectors are less cyclical than the energy or tech industries that drive larger metros. Cap rates in El Paso typically run 50 to 100 basis points higher than in primary Texas markets, meaning that properties generate stronger current yields even if appreciation is slower.
Compared to San Antonio, which shares a military anchor through Joint Base San Antonio, El Paso offers lower acquisition costs and less competition from institutional investors. Both cities benefit from stable government employment, but El Paso's cross-border trade adds an economic dimension that San Antonio lacks.
Compared to border cities like Laredo and McAllen, El Paso offers a larger and more diversified economy with less dependence on trade alone. Fort Bliss and UTEP provide demand anchors that smaller border cities cannot match.
For lenders, El Paso's key advantages include stable employment across military, education, and healthcare sectors, consistent cross-border demand, and a cost structure that supports healthy debt service coverage ratios even at current rate levels.
For a complete overview of all commercial lending options in El Paso, visit our El Paso commercial loans guide.
What Strategies Help El Paso Borrowers Navigate Refinancing Challenges?
Borrowers facing tight underwriting or unfavorable loan-to-value positions have several strategies available in El Paso'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.
Bridge-to-Permanent: For properties needing occupancy improvement or capital expenditure before qualifying for permanent financing, a short-term bridge loan (12 to 36 months) followed by a permanent refinance can be the most cost-effective path. El Paso's stable demand drivers make this strategy viable for multifamily, retail, 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, reducing rates, extending terms, and providing cash-out proceeds for business investment.
Hard Money as a Bridge: For properties that need immediate refinancing but do not yet qualify for conventional terms, hard money loans provide fast closing with the intention of refinancing into permanent debt once the property stabilizes.
Ready to explore your refinancing options? Contact our team for a free consultation on commercial refinance loans in El Paso.
Frequently Asked Questions
What is the minimum credit score needed for a commercial refinance loan in El Paso?
Most conventional commercial lenders require a minimum credit score of 680 for the borrowing entity's principals. 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. DSCR loans also prioritize property cash flow over personal credit history.
How long does the commercial refinancing process typically take in El Paso?
A straightforward commercial refinance in El Paso 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 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 El Paso?
Yes, cash-out refinancing is available through most commercial loan programs in El Paso. 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 available depends on the appraised value minus the existing loan balance and required equity retention.
What are the typical closing costs for a commercial refinance in El Paso?
Commercial refinancing closing costs in El Paso typically range from 1% to 3% of the loan amount. This includes an origination fee (0.5% to 1.5%), appraisal ($3,000 to $8,000 depending on property size), environmental assessment ($2,000 to $5,000), legal fees ($5,000 to $12,000), title insurance, and recording fees. El Paso's lower cost structure compared to larger metros means that some third-party costs run below national averages.
Should I choose a fixed rate or floating rate for my El Paso commercial refinance?
In the current environment, most El Paso borrowers choose fixed-rate financing for 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 makes fixed-rate loans safer for most hold strategies. Floating-rate loans still make sense for short-term holds (under 3 years) or properties undergoing value-add programs where early prepayment is likely.
How does El Paso's border location affect commercial refinancing terms?
El Paso's border location does not negatively affect refinancing terms for most commercial properties. Experienced lenders view the cross-border economy as a diversification benefit that supports property cash flows. The combination of military, education, healthcare, and trade-driven employment creates multiple demand streams that reduce vacancy risk. Lenders who are familiar with border markets, including both national platforms and regional banks, offer standard commercial terms without border-related risk premiums.