Why Should Gilbert Property Owners Consider Refinancing?
Commercial property owners in Gilbert, Arizona, have compelling reasons to evaluate refinancing their existing debt in 2026. The town's exceptional property value appreciation over the past decade, combined with evolving interest rate conditions, changes in property performance, and the maturation of existing loan terms, creates opportunities to improve cash flow, access equity, and optimize capital structures.
Gilbert's commercial real estate market has experienced significant value growth driven by the town's population expansion from 208,000 in 2010 to over 280,000 today, median household incomes exceeding $105,000, and consistently strong demand across retail, multifamily, office, and industrial property sectors. Property owners who purchased or developed assets five or more years ago may be sitting on substantial equity that a refinance can unlock.
Several scenarios make refinancing particularly advantageous for Gilbert property owners in 2026. Borrowers with adjustable-rate mortgages may benefit from locking in fixed rates before potential rate increases. Owners who have improved their properties through renovations or improved leasing may qualify for better terms reflecting the property's higher current value. Bridge loan borrowers who have stabilized their properties need to transition to permanent financing. And owners seeking capital for additional investments can use cash-out refinancing to access equity without selling their Gilbert properties.
Understanding the refinancing options available, the qualification requirements, and the costs involved is essential to determining whether a refinance makes financial sense for your specific situation.
Ready to explore refinancing options for your Gilbert commercial property? Contact our team.
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What Types of Commercial Refinance Loans Are Available in Gilbert?
Gilbert commercial property owners have access to multiple refinancing programs, each suited to different objectives and property profiles.
Rate-and-Term Refinance
A rate-and-term refinance replaces the existing mortgage with a new loan at potentially better rates, different terms, or both, without extracting additional equity. This is the most common refinance type and is used to lower monthly payments, switch from adjustable to fixed rates, extend amortization periods, or simply replace a maturing loan.
Rate-and-term refinance rates in Gilbert range from 5.75% to 7.50% for conventional commercial mortgages in early 2026. LTV ratios up to 75% to 80% are available depending on property type, with multifamily properties qualifying for the highest leverage. Terms range from 5 to 30 years.
Cash-Out Refinance
A cash-out refinance replaces the existing mortgage with a larger loan, allowing the property owner to extract equity in cash. This equity can be used for property improvements, debt consolidation, additional property acquisitions, business expansion, or other purposes. Cash-out refinancing is particularly attractive for Gilbert property owners who have seen significant appreciation.
Cash-out refinance rates are typically 25 to 50 basis points higher than rate-and-term refinance rates, reflecting the additional risk of higher leverage. Maximum LTV for cash-out refinancing is typically 65% to 75% depending on property type.
Bridge-to-Permanent Refinance
Borrowers who used bridge loans to acquire and stabilize commercial properties in Gilbert frequently refinance into permanent financing once the property achieves target occupancy and cash flow. This transition from short-term, higher-cost bridge debt to long-term, lower-cost permanent financing is a critical step in the value-add investment process.
Permanent financing rates for properties transitioning from bridge loans range from 5.75% to 7.75% depending on the property's stabilized performance, the borrower's credit profile, and the loan program selected.
DSCR Refinance
DSCR refinancing allows property owners to refinance based on the property's cash flow rather than personal income documentation. This is ideal for investors with multiple properties, self-employed borrowers, or those with complex income structures who want to refinance without the burden of extensive income verification.
DSCR refinance rates in Gilbert range from 6.75% to 9.00%, with LTV up to 80% for properties with strong cash flow (DSCR of 1.25x or higher). Use our DSCR calculator to evaluate your property's eligibility.
SBA Refinance for Owner-Occupied Properties
The SBA loan program offers refinancing options for business owners who occupy their commercial properties. SBA 504 refinancing provides long-term fixed rates typically between 5.25% and 6.75% with up to 90% LTV. This program can also include additional funds for property improvements, equipment purchases, and working capital.
Agency Refinance (Multifamily)
Multifamily property owners in Gilbert can refinance through Fannie Mae and Freddie Mac agency programs, which offer the most competitive rates in the market (5.20% to 6.50%) with fixed terms up to 30 years and LTV up to 80%. Agency refinancing is available for stabilized apartment properties with five or more units and strong occupancy.
When Does Refinancing Make Financial Sense in Gilbert?
Refinancing involves costs, so property owners should carefully evaluate whether the benefits justify the expense. Here are the key scenarios where refinancing typically makes financial sense.
Lower Interest Rate Available
If current market rates are 100 basis points or more below your existing rate, refinancing can produce significant interest savings over the remaining loan term. For a $2 million commercial mortgage, reducing the rate by 1% saves approximately $20,000 per year in interest. Over a 10-year term, that savings exceeds $200,000, far more than offsetting refinancing costs.
Loan Maturity Approaching
Commercial mortgages with balloon payments at maturity (typically after 5, 7, or 10 years) require refinancing or payoff at maturity. Starting the refinancing process 6 to 12 months before maturity gives borrowers time to secure the best available terms and avoid default or extension fees.
Property Value Has Increased
Gilbert's property values have appreciated significantly over the past decade. If your property is worth substantially more than when you last financed it, refinancing at the new appraised value can unlock equity through a cash-out refinance or reduce your effective LTV, potentially qualifying you for better rates and terms.
Property Performance Has Improved
If you have increased rents, improved occupancy, reduced expenses, or added amenities since your last financing, the property's higher net operating income and DSCR may qualify for significantly better loan terms. This is particularly common for Gilbert property owners who have completed value-add renovations.
Switching from Adjustable to Fixed Rate
Borrowers with adjustable-rate mortgages may want to lock in fixed rates to protect against potential rate increases. Fixed-rate refinancing provides payment certainty and protects cash flow from interest rate volatility.
Consolidating Debt
Property owners with multiple loans on the same property (first mortgage, second mortgage, mezzanine debt) can consolidate into a single loan with simpler terms and potentially lower overall cost.
What Are Current Refinance Rates by Property Type in Gilbert?
Refinance rates in Gilbert vary by property type, reflecting the different risk profiles and underwriting standards for each sector.
Multifamily Refinance
Multifamily properties receive the most favorable refinance terms in Gilbert, with agency (Fannie Mae/Freddie Mac) rates from 5.20% to 6.50% and conventional rates from 5.75% to 7.00%. LTV ratios up to 80% are available for stabilized properties with occupancy above 90%. Gilbert's multifamily market, with average rents exceeding $1,700 per month and occupancy above 94%, creates strong refinancing fundamentals.
Retail Refinance
Stabilized retail properties with quality tenants refinance at rates from 5.75% to 7.50%, with LTV up to 70% to 75%. Grocery-anchored centers and NNN-leased properties with credit tenants qualify for the most competitive terms. Gilbert's retail vacancy of 4% to 6% supports favorable underwriting.
Office and Medical Office Refinance
Office refinance rates range from 6.00% to 7.75%, with medical office properties qualifying for the lower end due to longer lease terms and lower vacancy risk. LTV caps range from 65% to 75%.
Industrial Refinance
Industrial properties with stabilized tenancy refinance at rates from 5.75% to 7.50%, with LTV up to 70% to 75%. NNN-leased industrial properties with credit tenants achieve the most competitive rates.
Mixed-Use Refinance
Mixed-use property refinance rates range from 6.00% to 7.75%, with terms reflecting the blended risk of the property's various use components. LTV caps range from 65% to 75%.
What Do Lenders Require for a Commercial Refinance in Gilbert?
Refinance underwriting evaluates both the property's current performance and the borrower's financial position.
Current Appraisal: A new commercial appraisal is required to establish the property's current market value. Gilbert's property appreciation means that many properties will appraise higher than their original purchase price, potentially improving LTV ratios and qualifying borrowers for better terms.
DSCR Analysis: Lenders calculate the property's current DSCR using the most recent 12 months of operating income. Conventional refinance lenders typically require 1.20x to 1.35x depending on property type. DSCR refinance programs may accept ratios as low as 1.0x.
Property Condition: Lenders evaluate the property's physical condition, including deferred maintenance, remaining useful life of major systems, and any needed capital improvements. A property condition assessment may be required.
Lease Analysis: For income-producing properties, lenders review all leases for tenant credit quality, remaining lease terms, renewal options, and rollover risk.
Credit Score: Conventional refinancing typically requires a minimum credit score of 680. DSCR refinance programs may accept scores as low as 620.
Existing Loan Payoff: Lenders need a payoff statement from the current lender, including any prepayment penalties. Prepayment penalties can significantly impact the financial benefit of refinancing and should be factored into the decision.
Use our commercial mortgage calculator to compare your current payments with potential refinance scenarios.
How Does the Refinance Process Work in Gilbert?
The commercial refinance process follows a structured timeline, typically taking 30 to 90 days from application to closing.
Step 1: Preliminary Analysis (1 to 5 Days) The lender reviews the property's current performance, existing loan terms, and the borrower's objectives to determine if refinancing makes financial sense. A preliminary rate quote and term sheet may be issued.
Step 2: Application (1 to 2 Weeks) The borrower submits a formal application with property financials (rent roll, operating statements), existing loan documents, personal financial statements, and entity documents.
Step 3: Appraisal and Reports (2 to 3 Weeks) A new commercial appraisal is ordered to establish current market value. Phase I environmental assessments and property condition reports may also be required.
Step 4: Underwriting (2 to 3 Weeks) The lender analyzes the property's cash flow, tenant quality, market position, and borrower qualifications. DSCR, LTV, and debt yield metrics are calculated and compared against program requirements.
Step 5: Approval and Closing (1 to 2 Weeks) Once approved, loan documents are prepared and closing is scheduled. The new loan pays off the existing mortgage, with any cash-out proceeds distributed to the borrower. Title insurance is updated and recorded.
What Are the Costs of Refinancing a Commercial Property in Gilbert?
Refinancing involves several costs that should be weighed against the expected benefits.
Origination Fees: Typically 0.50% to 2.00% of the new loan amount. For a $2 million refinance, origination fees range from $10,000 to $40,000.
Appraisal Fees: Commercial appraisals typically cost $3,000 to $8,000 depending on property type and complexity.
Environmental Assessment: Phase I environmental reports cost $2,000 to $4,000.
Title Insurance and Recording: Title insurance premiums and recording fees typically range from $3,000 to $8,000.
Legal Fees: Attorney fees for loan document review range from $2,000 to $5,000.
Prepayment Penalty on Existing Loan: This is often the largest refinancing cost. Prepayment penalties can range from 1% to 5% of the outstanding loan balance or may be calculated using yield maintenance or defeasance methods. Some loans have no prepayment penalty after an initial lockout period.
Break-Even Analysis: Total refinancing costs should be compared against annual interest savings to determine the break-even period. A refinance that pays for itself within 12 to 24 months is generally considered attractive.
Frequently Asked Questions About Commercial Refinancing in Gilbert
How soon can I refinance a commercial property in Gilbert?
Most commercial loans can be refinanced after a minimum seasoning period, which is typically 6 to 12 months from the original closing date. Some loan programs have no seasoning requirement. The key constraint is often the prepayment penalty on the existing loan, which may make early refinancing financially unattractive.
Can I do a cash-out refinance on a commercial property in Gilbert?
Yes. Cash-out refinancing is available for commercial properties in Gilbert through conventional, DSCR, and agency (multifamily) programs. Maximum LTV for cash-out typically ranges from 65% to 75% depending on property type. The cash proceeds can be used for any purpose, including property improvements, debt consolidation, or additional investments.
What DSCR is needed to refinance a commercial property in Gilbert?
Conventional refinance lenders typically require a DSCR of 1.20x to 1.35x. DSCR loan programs may accept ratios as low as 1.0x to 1.10x. Higher DSCR ratios qualify for better rates and terms. Use our DSCR calculator to evaluate your property.
How long does a commercial refinance take in Gilbert?
Most commercial refinances close in 30 to 75 days. Conventional loans take 45 to 75 days. DSCR refinances take 30 to 45 days. Agency multifamily refinances take 45 to 60 days. Bridge loan refinances can close in 14 to 30 days for urgent situations.
Should I refinance or sell my Gilbert commercial property?
This depends on your investment objectives, the property's current performance, market conditions, and tax implications. Refinancing allows you to access equity while retaining ownership and avoiding capital gains taxes. Selling provides a complete exit but triggers tax obligations. A 1031 exchange can defer taxes if you purchase a replacement property. Our lending team can help you evaluate both options.
What prepayment penalties should I expect on my existing commercial loan?
Prepayment penalties vary widely by loan type and lender. Common structures include step-down penalties (5% in year 1, 4% in year 2, etc.), yield maintenance (makes the lender whole for lost interest income), defeasance (replacing the loan with bonds), and flat penalties (1% to 3% of the outstanding balance). Some loans have open prepayment windows or no penalty after an initial lockout period. Review your existing loan documents carefully before pursuing a refinance.
What Should Your Next Step Be?
Refinancing your Gilbert commercial property can unlock substantial value, whether through lower monthly payments, access to equity, improved loan terms, or the transition from short-term to permanent financing. With Gilbert's strong property values, healthy occupancy rates, and favorable market fundamentals, many commercial property owners are well-positioned to benefit from a strategic refinance.
Contact Clearhouse Lending today to discuss your Gilbert commercial refinancing options. Our team will analyze your current loan, evaluate your property's market value and cash flow, and identify the refinancing program that best supports your investment objectives. We offer conventional, agency, DSCR, SBA, and bridge loan refinancing options for all commercial property types throughout the Phoenix metro area.
Sources: CoStar Phoenix Metro Reports, Mortgage Bankers Association, Federal Reserve Economic Data, Town of Gilbert Economic Development, U.S. Census Bureau, Maricopa County Assessor