Commercial refinancing in Virginia Beach offers property owners the opportunity to reduce debt service costs, access accumulated equity, and improve overall investment returns in a market where rising rents and strong demand fundamentals have increased property values across most property types. Whether you own a multifamily complex near NAS Oceana, a retail center in Lynnhaven, an industrial facility along the I-264 corridor, or an office building in the Town Center district, understanding when and how to refinance can meaningfully impact your bottom line.
This guide covers everything you need to know about commercial refinancing in Virginia Beach, from available loan programs and current rates to strategic considerations and the refinance process.
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Why Should Virginia Beach Property Owners Consider Refinancing Now?
The Virginia Beach commercial real estate market has experienced sustained improvement across multiple property types, creating conditions where many property owners can benefit from refinancing their existing loans.
Several market dynamics make 2026 a particularly favorable time to evaluate refinancing options.
Rising property values across Virginia Beach mean many properties are worth more today than when they were last financed. Hampton Roads multifamily rents grew approximately 2.8% year-over-year, industrial rents grew roughly 3.2%, and office rents increased approximately 2.8%. These rent increases translate directly into higher NOI and higher property values, which means property owners can access more equity through cash-out refinancing or achieve lower LTV ratios that unlock better rates.
Improved vacancy metrics strengthen refinance applications. Hampton Roads multifamily vacancy declined to approximately 5.2%, retail tightened to around 3.9%, and the office market posted positive net absorption of approximately 131,000 square feet in Q4 2025. Lower vacancy means stronger income, which improves DSCR ratios and qualifies borrowers for more favorable terms.
Rate opportunity for higher-rate borrowers is significant. Property owners who acquired or last refinanced during the 2022-2024 period of elevated rates may be paying 7% or more. With conventional rates starting at approximately 5.23% and agency apartment rates from approximately 5.11%, the potential savings on a $5 million loan balance can reach $75,000 to $100,000 annually.
Maturing loans create an urgent refinancing need. Commercial loans with 5, 7, or 10 year terms that are approaching maturity require refinancing to avoid balloon payments or unfavorable extension terms. Virginia Beach property owners with loans maturing in 2026 or 2027 should begin the refinance process 6 to 12 months before maturity to ensure adequate time for lender selection and underwriting.
Bridge and construction loan exits are a primary refinancing driver. Investors who used bridge loans for value-add acquisitions and developers completing construction projects need permanent financing to replace their short-term debt. The lower permanent rates represent a significant reduction in carrying costs.
For a comprehensive overview of all Virginia Beach financing options, visit our Virginia Beach commercial loans guide.
What Types of Commercial Refinance Loans Are Available in Virginia Beach?
Virginia Beach property owners have access to multiple refinancing programs, each designed for different property types, borrower profiles, and strategic objectives.
Agency Refinance (Fannie Mae/Freddie Mac) offers the lowest rates and highest leverage for multifamily properties with five or more units. Rates start at approximately 5.11%, with LTVs up to 80% for rate-and-term refinances and 75% for cash-out. Terms extend to 30 years with options for fixed-rate and adjustable-rate structures. Agency refinances are non-recourse in most cases. Virginia Beach's tight multifamily vacancy (5.2%) and strong military-driven demand make apartment properties particularly well-positioned for agency refinancing.
Conventional Bank Refinance serves all stabilized commercial property types at rates from approximately 5.23% to 7.00%. LTVs reach 75% for rate-and-term and 70% for cash-out, with terms of 5 to 25 years. Regional banks with Hampton Roads market knowledge, such as TowneBank and Atlantic Union Bank, often provide competitive terms and streamlined processing for local borrowers.
CMBS Refinance provides non-recourse financing for larger properties at 5.50% to 7.00% with 7 to 10 year terms. CMBS refinances work well for stabilized properties above $5 million where the borrower values non-recourse structure and rate certainty.
SBA 504 Refinance allows owner-occupants to refinance existing debt with up to 90% LTV and fixed rates from approximately 5.50% to 6.50%. This program is valuable for Virginia Beach business owners who want to reduce their monthly payment, lock in a long-term fixed rate, or access equity for business expansion.
DSCR Refinance qualifies based on the property's income rather than borrower income documentation. Rates start at approximately 6.00% with LTVs up to 75% to 80% and 30-year terms. DSCR refinancing is ideal for Virginia Beach investors with multiple properties or complex financial situations who want streamlined qualification. Use our DSCR calculator to evaluate whether your property qualifies.
Bridge-to-Permanent Refinance is the transition from a short-term bridge or construction loan to permanent financing. This is the most time-sensitive refinance scenario, as bridge loan maturity creates a hard deadline for securing permanent debt.
How Do You Determine if Refinancing Makes Financial Sense?
Not every Virginia Beach property benefits from refinancing. The decision requires a quantitative analysis that accounts for rate savings, closing costs, prepayment penalties, and the time value of money.
Step 1: Calculate the Rate Differential. Compare your current interest rate to available market rates for your property type. A minimum differential of 0.75% to 1.00% is generally needed to justify refinancing costs, though larger loan balances can make even smaller differentials worthwhile.
Step 2: Quantify Closing Costs. Commercial refinancing costs typically range from 1% to 3% of the new loan amount, including lender origination fees, appraisal, title insurance, legal, and recording fees. For a $5 million refinance, expect $50,000 to $150,000 in closing costs.
Step 3: Assess Prepayment Penalties. Your existing loan may include prepayment penalties, yield maintenance, or defeasance requirements that add significant cost to refinancing. Review your current loan documents carefully. Some penalties decrease over time (step-down provisions), so timing the refinance to minimize the penalty is important.
Step 4: Calculate Breakeven Period. Divide total refinancing costs (closing costs plus prepayment penalty) by the monthly debt service savings to determine how many months it takes to recoup the refinancing expense. A breakeven period of 18 to 24 months or less generally indicates a favorable refinance.
Step 5: Evaluate Cash-Out Benefits. If you are extracting equity, assess the return on the cash-out proceeds. If the cash-out funds a renovation that increases NOI by 15% to 25%, or if the capital is redeployed into a new acquisition earning 8% or more, the cash-out refinance may create value even if the new rate is not significantly lower than your current rate.
Use our commercial mortgage calculator to model different refinancing scenarios and quantify potential savings.
What Does the Virginia Beach Refinance Process Look Like?
The commercial refinance process in Virginia Beach follows a structured sequence from initial evaluation through closing, typically taking 30 to 75 days depending on the loan program.
The most important preparatory step is assembling a current, accurate financial package for your property. Lenders will require a current rent roll showing all tenants, lease terms, and rental rates. A trailing 12-month (T-12) operating statement showing actual income and expenses. A personal financial statement for all guarantors. A property condition report documenting the current state of the building. An environmental assessment (Phase I) if one has not been completed within the past year.
For Virginia Beach properties specifically, have flood zone documentation readily available. Properties in FEMA flood zones require current flood insurance policies, and the lender will verify adequate coverage as a condition of the refinance.
The appraisal is a critical element of the refinance process because it determines the maximum loan amount at the target LTV. Virginia Beach's rising rents and strong demand fundamentals should support favorable appraisals for well-maintained properties in active submarkets. Properties that have been improved since the last financing (renovated units, new tenants, increased occupancy) should provide the appraiser with documentation of these improvements to support the highest defensible value.
Timeline expectations vary by program. DSCR refinances can close in 30 to 45 days due to streamlined documentation. Conventional bank refinances take 45 to 75 days. Agency refinances require 45 to 75 days. CMBS refinances take 60 to 90 days. SBA 504 refinances require 60 to 120 days.
What Refinance Opportunities Exist by Property Type in Virginia Beach?
Each property type in Virginia Beach presents distinct refinancing dynamics based on the current market conditions and available loan programs.
Multifamily refinancing benefits from the strongest market position. With vacancy at approximately 5.2% and rents growing around 2.8% year-over-year, Virginia Beach apartment properties qualify for the lowest available rates (5.11% agency) and the highest leverage (80% LTV rate-and-term). Military housing demand provides a backstop that gives lenders exceptional confidence in multifamily income stability. Property owners who acquired apartments during the 2022-2024 rate peak can achieve dramatic savings by refinancing to current agency rates.
Industrial refinancing captures the value of significant rent appreciation. With Hampton Roads industrial rents rising approximately 38% since 2020 and vacancy at 7.7%, many industrial property owners have seen substantial value increases. A cash-out refinance can extract this appreciation for reinvestment while locking in a competitive long-term rate. The contracting construction pipeline (1.7 million square feet under construction versus a 4.3 million five-year average) supports continued value growth.
Retail refinancing benefits from Virginia Beach's exceptionally tight 3.9% vacancy. Properties in the Lynnhaven, Hilltop, and Shore Drive corridors with stable tenant rosters and NNN lease structures present straightforward refinancing opportunities. The strong leasing market (228,311 square feet across 58 leases in Virginia Beach during Q1 2025 alone) gives lenders confidence in income stability.
Office refinancing requires more careful positioning. The 12.8% Hampton Roads office vacancy means lenders are selective, but Virginia Beach properties with defense contractor tenants, medical office users, or Town Center locations can still access competitive terms. The positive Q4 2025 absorption of approximately 131,000 square feet signals improving momentum.
Mixed-use refinancing benefits from Virginia Beach's SGA development momentum. Properties in the Town Center corridor with established residential occupancy and commercial tenancy present strong refinancing candidates, particularly as the Pembroke Mall redevelopment and ongoing Town Center expansion increase surrounding property values.
What Are the Most Common Refinancing Mistakes to Avoid?
Several common mistakes can reduce the financial benefit of refinancing or create problems during the process.
Starting too late on maturing loans is the most dangerous error. If your loan matures in 6 months or less, you have limited negotiating leverage and may be forced to accept unfavorable terms or costly extensions. Begin the refinance process 9 to 12 months before maturity for the best outcomes.
Ignoring prepayment provisions can result in unexpected costs. Yield maintenance and defeasance penalties on CMBS loans can amount to 3% to 10% or more of the loan balance, potentially negating the interest rate savings from refinancing. Review your existing loan documents with a legal advisor before committing to refinance.
Underestimating closing costs leads to unrealistic savings projections. Budget 1% to 3% of the new loan amount for total closing costs, including origination, appraisal, title, legal, and recording fees.
Overleveraging through cash-out can leave the property with inadequate DSCR coverage if rents decline or vacancy increases. Maintain a DSCR cushion above the minimum 1.25x to protect against market fluctuations.
Neglecting property condition before the appraisal can result in a lower-than-expected valuation. Address deferred maintenance, complete in-progress renovations, and ensure strong curb appeal before the appraiser visits.
Contact Clearhouse Lending to evaluate refinancing options for your Virginia Beach commercial property and receive personalized rate quotes.
Frequently Asked Questions About Commercial Refinancing in Virginia Beach
What are current commercial refinance rates in Virginia Beach?
Commercial refinance rates in Virginia Beach start at approximately 5.11% for agency (Fannie Mae/Freddie Mac) multifamily financing. Conventional bank refinance rates start around 5.23% for stabilized properties. CMBS rates range from approximately 5.50% to 7.00%. DSCR refinance rates start around 6.00%. SBA 504 refinance rates range from roughly 5.50% to 6.50% for owner-occupants. Actual rates depend on property type, occupancy, DSCR, LTV, and borrower profile.
Can I do a cash-out refinance on my Virginia Beach property?
Yes, cash-out refinances are available for Virginia Beach commercial properties that have appreciated in value. Maximum LTV for cash-out is typically 70% to 75% of the current appraised value, compared to 75% to 80% for rate-and-term refinances. The cash-out proceeds can be used for renovations, new acquisitions, debt consolidation, or any other purpose. Virginia Beach's rising rents and strong demand fundamentals have increased property values across most asset classes, creating equity that can be accessed through cash-out refinancing.
How much does it cost to refinance a commercial property in Virginia Beach?
Refinancing costs typically range from 1% to 3% of the new loan amount. For a $5 million refinance, expect $50,000 to $150,000 in total costs including lender origination fees (0.5-1%), appraisal ($3,000-$10,000), title insurance ($5,000-$15,000), legal fees ($3,000-$8,000), and recording fees. Prepayment penalties on the existing loan can add additional costs ranging from 1% to 10% depending on the penalty structure.
When should I start the refinance process for a maturing loan?
Begin the refinance process 9 to 12 months before your loan maturity date. This provides adequate time for lender shopping, application, underwriting, appraisal, and closing without the pressure of an imminent balloon payment deadline. Starting early also gives you more negotiating leverage and the ability to wait for favorable market conditions. Borrowers who wait until 3 months or less before maturity often face limited options and less favorable terms.
Can I refinance from a bridge loan to permanent financing in Virginia Beach?
Yes, bridge-to-permanent refinancing is one of the most common refinance scenarios in Virginia Beach. After completing a value-add renovation and stabilizing the property (typically achieving 90% or higher occupancy for at least 90 days), borrowers refinance from their bridge loan (7-14% rate) to permanent financing (5.11-7.00% rate). This transition reduces carrying costs dramatically and locks in the equity created through the value-add strategy. Start working with permanent lenders 3 to 6 months before your bridge loan maturity.
What DSCR do I need to refinance my Virginia Beach property?
Most Virginia Beach refinance lenders require a minimum DSCR of 1.20x to 1.25x. Agency lenders (Fannie Mae/Freddie Mac) typically require 1.25x for multifamily refinances. Conventional and CMBS lenders require 1.25x to 1.30x. DSCR-specific loan programs may accept ratios as low as 1.00x, though rates improve substantially at 1.25x and above. Virginia Beach's strong rental market means most well-maintained, well-located properties meet DSCR requirements comfortably. Contact Clearhouse Lending to evaluate your refinancing options.