Single and Credit Tenant Lease Financing




Collateral                         First deed of trust (Mortgage) on the property being financed, assignment of leases and rents and/or guarantee from tenant.


Loan Types                     Immediate funding on variable or fixed rate construction loan combined with a forward fixed rate permanent CTL bond loan.  The combined loan is closed before ground is broken and both the construction and forward interest rates are locked prior to closing.


Property Types               Single tenant properties occupied by tenants that are investment grade (Baa3/BBB-) or better.  Properties are approved on a case by case basis, but the more traditional property types (retail, industrial, warehouse, office, MOB) are usually acceptable.  A strong sponsor/borrower is typically required. 


Locations Considered    Nationwide, but strong consideration is given to local market conditions.


Lease Requirements      Bond net, triple net or double net leases (landlord responsibilities will be reserved and/or insured). Lease payment hard lockbox is required.


Ownership                       Must be a bankruptcy-remote special purpose entity (SPE), typically a LLC.


Loan Amounts                $20,000,000 to $150,000,000.


DCR / LTV                       DCR:  1.00x to 1.05x depending on the tenant rating and lease term conditions
 LTV:  Construction Phase:  90% to 95% of cost depending on strength of sponsor/borrower
            Permanent Phase:  Up to 100% of appraised value.  No loan to cost restrictions - can exceed 100%.


Interest Rate                    Variable (LIBOR based) or fixed for construction phase.  Fixed for CTL permanent phase.  Locked at commitment.


Expenses & Fees             Typically a point construction loan fee and a point placement fee, third party reports (appraisal, environmental, property condition, survey, etc.); lender’s legal fees, property inspection and underwriting fee of $5,000.


Term                                 Duration of financing is coterminous with initial lease term, typically 10-30 years. 


Amortization                   Typically fully amortizing over the lease term on a 30/360 basis. 


Guaranty                          Recourse during the construction phase and non-recourse during the CTL permanent phase.


Reserves                           Varies, depending on lease terms.


Prepayment                     Yield maintenance.

  Construction/Permanent CTL Bond Loan Program