Retail, office and industrial loans
Financing for income-producing commercial property: single tenant net lease, neighbourhood and strip centers, medical and professional office, warehouse, flex and light industrial. Bank, CMBS, life company, credit union and debt fund executions.
Who this is for
Owners of income-producing commercial property: a neighbourhood center with a grocer and eight inline tenants, a single tenant drugstore on a twenty-year lease, a medical office building, a 40,000 square foot warehouse, a small-bay flex park.
The lease is the asset
For every property on this page, the underwriting question is not really about the building. It is about the rent roll: who is paying, for how long, at what rate relative to market, and what happens when they leave. A lender sizes the loan against income they believe will still be there in year ten.
That is why two visually identical buildings get very different quotes. Weighted average lease term, tenant credit, rollover schedule, rent relative to market, and the cost of re-tenanting the space are the five inputs that move proceeds more than anything about the roof.
It is also why the package matters. A rent roll with lease abstracts, options, escalations and expense reimbursement structure written out gets a serious quote. A one-line email gets a cautious one.
What we need to quote
- Rent roll with commencement, expiration, options and escalations
- Trailing twelve months of operating statements, and a current-year budget
- Lease abstracts or the leases themselves for major tenants
- Purchase contract or existing debt payoff
- Sponsor financial statement, schedule of real estate owned and liquidity
- Capital expenditure history and anything planned
Income property questions
What kills a retail or office deal in underwriting?
Lease rollover concentration, almost every time. A center where 60% of the rent expires inside the loan term will be sized down, reserved heavily, or declined: not because the tenants are bad, but because the lender is underwriting the day after they leave. The fixes are real: renew early, stagger the rollover, or accept a rollover reserve and a lower proceeds number.
How is single tenant net lease underwritten differently?
On the tenant’s credit and the lease, more than the building. An investment-grade corporate guarantee with fifteen years of term remaining is financeable at leverage and pricing that a multi tenant center cannot touch. A franchisee guarantee with six years left is a different asset entirely, even if the sign out front is identical. Lease term relative to loan term is the number that matters most.
Is office financeable at all right now?
Yes, selectively, and the market is honest about it. Medical office, small professional office with owner-occupancy, and well-leased suburban product with staggered rollover all get quoted. Large multi tenant office with near-term rollover in a soft submarket is difficult and expensive from anyone. We will tell you which one you have before you spend money on reports.
What is defeasance and should I care?
It is the prepayment mechanism on most CMBS loans: instead of paying a fee, you substitute a portfolio of government securities that replicates the remaining payments. It is expensive and cumbersome, and it is why a CMBS loan with an attractive rate may be the wrong loan if you might sell in year four. Prepayment structure deserves the same attention as rate, and almost never gets it.
Can I get non recourse?
On CMBS, life company and most debt fund executions, yes, with standard carve-outs. Bank and credit union debt is usually full recourse, sometimes burning off to partial on performance. Non recourse typically costs you something, leverage, rate or both, and that trade is worth pricing rather than assuming.
Do you do smaller deals, under $1MM?
Small balance commercial under roughly $1MM is genuinely hard to place in the institutional market, the fixed costs of a quote do not change with loan size. Local banks and credit unions are usually the right answer there, and we have those relationships. Under $5MM and fast, our own balance sheet is frequently better than anything we could shop.
Every deal gets a real answer
Tell us the property, the plan and the number you need. A credit officer reads it and tells you what it will support.
- Texas hard money. A term sheet from the people who fund the loan.
- Commercial, all 50 states. Quotes from the desks that cover your asset.
- Outside the box? A straight reason, and usually a name that does fund it.