• Central Business District (CBD)
• OfficeSuburban Garden Office
• Suburban High Rise Office
• Medical Office
• Other Office

CBD Office
An Office subtype characterized by its location in a Central Business District (CBD); the downtown section of a city, generally consisting of retail, office, hotel, entertainment, and government land uses with some high-density housing.

Suburban Garden Office
An Office subtype characterized by a garden-like setting and its location in a town or unincorporated developed area in a close proximity to a city. Suburbs, largely residential, are often dependent on the city for employment and support services; generally characterized by low-density development relative to the city; usually one to three story structures in a suburban or rural-urban fringe development.

Suburban High Rise
An Office subtype characterized typically by a high number of stories that requires an elevator and its locations in a town or unincorporated developed area in a close proximity to a city. Suburbs, largely residential, are often dependent on the city for employment and support services; generally characterized by low-density development relative to the city; usually a four-story or higher structure in a suburban or rural-urban fringe development.


Medical Office
An Office property subtype in which the property is occupied by one or more tenants and the property is utilized for medical office purposes (e.g. physician/dentist offices, medical laboratory, outpatient clinic, etc.).

Flex Space
An Industrial property subtype in which the property is occupied by one or more tenants and the property is utilized for industrial/office purposes. A Flex space property is typically a one or two story building with little or no common areas, high ceilings, loan-bearing floors and loading dock facilities; usually configured to allow a small amount of office space in combination with light assembly or warehouse/distribution uses.



Surrounding Land Use  (Property Info.)
Identifies the surrounding land use in comparison to the collateral property.

Office Surrounding Land Use
Identifies the general land use of the surrounding and/or adjacent properties in comparison to the collateral property. Office uses include most uses involving the carrying on of business.

Class B Office Surrounding Land Use
Identifies the general land use of the surrounding and/or adjacent properties in comparison to the collateral property. A Class B Office property classification refers to properties that frequently do not possess design and finish reflective of current standards and preferences; construction is adequate; command average rental rates; generally are well maintained by national or regional management companies; unit sizes are usually larger than current standards.

Class C Office Surrounding Land Use
Identifies the general land use of the surrounding and/or adjacent properties in comparison to the collateral property. A Class C Office property classification refers to properties that provide adequate functionality, exhibit some level of deferred maintenance; command below average rental rates; usually located in less desirable areas; generally managed by smaller, local property management companies; tenants provide a less stable income stream to property owners than Class A and B tenants.

Medical Office Surrounding Land Use
Identifies the general land use of the surrounding and/or adjacent properties in comparison to the collateral property. A Medical Office property classification refers to a property that is occupied by one or more tenants and the property is utilized for medical office purposes (e.g. physician/dentist offices, medical laboratory, outpatient clinic, etc.).

Industrial w/Office Tenant Type
Characterizes the tenant type based on a combination of uses of the leased area.

Office Tenant Type
Characterizes the tenant type based on usage of the leased area; Office usage generally includes most uses involving the carrying on of business.

Below are typical issues and required calculations we address for each type of commercial property.
 

Office Financing
Best Rates are associated with: Properties with >1.25 DSCR, <75% LTV, <10% vacancy, appropriate TI/LC, Cap Ex reserves

LTV up to 90%

Occupancy down to 51%

Amortized to 30 years

Permanent (Purchase and Refinance) loans from $25 Thousand to $1 Billion

Construction loans from $200 Thousand to $300 Million

Bridge loans from $200 Thousand to $1 Billion

Hard Money

Issues:

Owner-occupied properties - leases are marked-to-market, using market rent

Staggered lease expirations should display no TILC deficiencies during loan term

Spreads are typically lower for properties exhibiting a stabilized Trailing 24-36 Month Net Cash Flow

Net Cash Flow calculations include Replacement Reserves

Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF

General Required Calculations: (we do these calculations for you)

Rent Roll illustrating in-place occupancy and Potential Gross Income

Effective Gross Income - Potential Gross Income less the > of underwritten or market vacancy

Net Operating Income - EGI minus operating expenses

Net Cash Flow - NOI less Tenant Improvements, Leasing Commissions, Capital Expenditures

Debt Service Coverage Ratio - NOI divided by Annual Debt Service

Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request

For Definitions of Commercial property types etc... (see Commercial Glossary)




Commercial property loan rates are at all time low.

March 01, 2006 - National Average on a $1,000,000 loan amount,
amortized at 25 years.

• Fixed rates are based on a 10-Year fixed rate term.
• Fixed rates reflect conduit lenders and
• Variable rates reflect portfolio lenders.

Office Buildings Financing Permanent Loan Amounts - $25,000 - $1 Billion

• Fixed Rate Retail Property Loans 5.54 - 8.35%
• Variable Rate Loans for Retail Properties 4.91 - 6.25%
  • Cap Rate 7.7% to 10.9%

Colorado Rates remain below, the above National Avg.
See our rate page for all markets effecting rates

Commercial mortgage lenders typically require specific loan level data about a property in order to analyze the underwriting risk, prepare a loan quote, and ultimately fund a loan. Mortgage brokers are a primary source of commercial loan originations today. As a result, lenders' expectations regarding the level of reporting, analysis and overall quality of the origination are increasing.

Unfortunately, there are many brokers who can't obtain financing for commercial properties because they use a residential loan application to submit to lenders
- BIG MISTAKE !

See Example Loan Package Extracts

Unlike Residential financing where the Borrower must qualify for the mortgage product; Commercial financing differs whereby the Property must qualify (not the borrower).

How MTG Brokers Corp. Gets You the Best Rate for Your Commercial Property

Commercial mortgage rates are commonly based on the 10-Year US Treasury yield plus a lender Margin/Spread.
 
The interest Rate Index change is based upon market and trading conditions, while spreads are influenced by loan/property factors - primarily Debt Service Coverage and Loan To Value.
 
Property that demonstrates a high DSCR and low LTV will likely command a lower interest rate.  

MTG addresses DSCR/LTV issues via calculations to analyze reserves, fees and other lender underwriting constraints that can impact a properties Net Cash Flow and therefore, the overall interest rate and loan pricing at the time of your loan origination.
 
This is where others fail to obtain you a lender commitment and why we don’t collect any fees until after an offer is submitted by a lender to you “for your approval”
(Typically, A National, Regional or Colorado Lender You Know and Trust !)

Commonly Required Property Data and Format

While loan submission requirements may vary among lenders, most lenders request the inclusion of the following core loan data:

General property and building description

Current rent roll to reflect lease start/end dates, square footage or unit type, contract rent, rent escalations, reimbursement issues, and estimated market rent

Property income and expense worksheet including calculations for net operating income (NOI) using at least two historical years of income and expense

Calculation and support of normalized net cash flow (NCF) including appropriate reserves based on property type (e.g., vacancy & collection Loss, management, capital expenditures, tenant improvement costs, leasing commission costs (TILC)

Reconciliation of direct capitalized value to purchase price

Loan amount constrained by maximum loan to value (LTV) and debt service coverage ratio (DSCR)

For a Retail Commercial Loan (Click Here)
Construction, Purchase, Refinance, Bridge, Hard Money

Or Visit One of These Pages


Office Building Commercial property Loan Rates and Financing Info.
Office Includes: Central Business District (CBD) Office, Suburban Garden Office, Suburban High Rise Office, Medical Office, Other Office, Doctor Office (for patients requiring bed space - Choose Health Care)

Retail Commercial property Loan Rates and Financing Info.
Retail Properties Include: Grocery, Strip Center, Mall, Outlet Center, and Specialty Center (Car Wash, Golf Course, Auto Repair, Dry Cleaners, Cemeteries.....), etc...

Industrial Warehouse Commercial property Loan Rates and Financing Info.
Industrial and Warehouse include: Warehouse with Office, R & D, Manufacturing, Flex Space, etc...

Multifamily Commercial property Loan Rates and Financing Info.
Multi Family: Apartments, Condos, Townhomes, Military and Student Housing, Community Developments, etc...

Lodging, Hotel, Motel Commercial property Loan Rates and Financing Info.
Hotel Include all Lodging, Motel, Economy, Luxury, Resort, Extended Stay, etc...

Mobile Home Parks Commercial property Loan Rates and Financing Info.
Mobile Home Parks: RV and other Pad rental space

Healthcare Commercial property Loan Rates and Financing Info.
Health Care: Nursing Home, Cognitive Care, Assisted Living, Hospitals, etc...

Self Storage Units Commercial property Loan Rates and Financing Info.
Self Storage (Mini-Storage, Climate Controlled / Refrigerated Storage, Yard Storage, Other Storage)

Mixed-Use Commercial property Loan Rates and Financing Info.
Mixed-Use: A combination of usually two of the following: Office, Retail, Hotel, Multifamily, Industrial

Including:
Community Development & Financing
Agricultural Use Property
Rural Area Lending
Land Financing

  
for other available financing options - Please see:

Hard Money

Please Visit Bridge Loans for for the development of new commercial properties, or the renovation and repositioning of existing properties, for both pre-leased and speculative development.

For Commercial Mortgage industry...
see our page on CMBS (Commercial Mortgage Backed Securities)
2nd mortgages not allowed...we show a way around this


see Mezzanine Loans ...for Commercial Mortgage Loan Financing
How to get a Junior Lien (similar to second mortgage)

1 - 4 Unit Financing (Typical Bank Loan Products for Investors), and 2nd home financing.
 

Fix-N-Flip for 1-19 unit investment financing
 

Investment_Specials

  
  
Also see Balloon Mortgage for Variable Rate & Cap Rate.
 
  
  
Please see the Commercial Only Glossary
(see Commercial Glossary)