Permanent Senior Debt For Commercial Real Estate
Commercial Real Estate Loans, Inc. understands the need for long-term capital, leveraged correctly, so as to improve levered returns. We also understand the need to drive down interest costs and increase cash-flow by maximizing amortizations.
Life companies offer the most aggressive permanent financing, but they look for Class A commercial properties in top MSAs. They also offer lower leverage and shorter amortizations. However, the longest fixed-rate loans are mostly fully amortizing.
CMBS loans start at just $2,000,000 and up, and offer the highest leverage (up to 75%), with the longest amortizations (up to 30 years). However, their spreads lead to higher rates than life company loans due to liquidity issues in the secondary market.
In comparison, banks will offer a good blend of the two commercial loan options. For larger transactions ($25,000,000 and up) everyone is be more aggressive. In addition, pension funds and large institutions will become players as well.
Commercial Mortgage Terms For Permanent Financing
Minimum Loan: $1MM.
Term: Up to 10 Years.
Leverage: Up to 75% LTV.
Amortization: 20 - 30 Years.
Recourse: Non-Recourse options available.
Prepayment: Defeasance, Step-Down, or Yield Maintenance.
Lenders Available For Permanent Financing
Regional & National Banks
Private Debt Funds
Permanent Financing Pros
Permanent Financing Cons
Call Protection (Expensive Prepayment Penalties)
Limited Ability to Recapitalize (With Sale or Refinance)