| Industrial
A general property type or building type classification characterized
by its usage for industrial purposes. Subtypes include: Warehouse
Single-Tenant, Warehouse Multi-Tenant, Manufacturing, Research &
Development, Flex Space, Light Industrial, Heavy Industrial, Other.
Industrial Property
A
property used for light or heavy manufacturing or warehouse space.
Property type also includes office/warehouse.
Industrial
and Warehouse Single or Multi-Tenant, Manufacturing, Flex
Space, Light to Heavy Industrial, R&D, Other
Industrial
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Industrial
Surrounding Land Use
Identifies
the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Industrial uses include Warehouse
Single-Tenant, Warehouse Multi-Tenant, Manufacturing, Research &
Development, Flex Space, Light Industrial, Heavy Industrial, Other.
Light
Industrial
An
Industrial property subtype in which the property is occupied by one
or more tenants and the property is utilized for light industrial purposes
(e.g. warehouse, light assembly, public utility plants, wholesale, motor
vehicle assembly or repair, heavy equipment garages, distribution centers,
mini-warehouses for storage, etc.).
Light
Industrial Surrounding Land Use
Identifies
the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Light Industrial refers to an
Industrial property subtype in which the property is occupied by one
or more tenants and the property is utilized for light industrial purposes
(e.g. warehouse, light assembly, public utility plants, wholesale, motor
vehicle assembly or repair, heavy equipment garages, distribution centers,
mini-warehouses for storage, etc.).
Industrial
Park Surrounding Land Use
Identifies
the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. An industrial park is a development
designed for specific industrial business types, which provides required
appurtenances including public utilities, streets, railroad sidings,
auto parking, and water and sewage facilities.
Heavy
Industrial
An
Industrial property subtype in which the property is occupied by one
or more tenants and the property is utilized for heavy industrial purposes
(e.g. heavy manufacturing, petroleum products, cement, junk yards, auto
junk yards, rock crushing plant, steel fabrication, etc.).
Heavy
Industrial - Surrounding Land Use
Identifies
the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Heavy Industrial refers to an
Industrial property subtype in which the property is occupied by one
or more tenants and the property is utilized for heavy industrial purposes
(e.g. heavy manufacturing, petroleum products, cement, junk yards, auto
junk yards, rock crushing plant, steel fabrication, etc.).
Class
A
A
property classification for properties that are above average in terms
of design, construction and finish; command the highest rental rates;
have a superior location, in terms of desirability and/or accessibility;
generally are professionally managed by national or large regional management
companies.
Class
B
A
property classification for 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
A
property classification for 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.
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.
Industrial
Tenant Type
Characterizes
the tenant type based on usage of the leased area; Industrial usage
generally includes most uses involving industrial purposes, such as
factories, manufacturing, research and development.
Industrial
w/Office Tenant Type
Characterizes
the tenant type based on a combination of uses of the leased area.
Warehouse
Multi-Tenant
An
Industrial property subtype in which the property is occupied by two
or more tenants and the property is utilized for warehouse purposes.
Warehouse
Single-Tenant
An
Industrial property subtype in which the property is occupied by one tenant
and the property is utilized for warehouse purposes.
Warehouse
Tenant Type
Characterizes
the tenant type based on usage of the leased area; Industrial usage generally
includes most non-manufacturing uses, such as warehouse.
For
Definitions of Commercial property types etc... (see
Commercial Glossary)
Below
are typical issues and required calculations we address for each type
of commercial property.
Industrial
Financing
Best Rates are associated with:
Properties with >1.25 DSCR, <70% LTV, <7% 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
- Flex/Multi-tenant
- 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 minus
the greater of underwritten or market vacancy
Net Operating Income - EGI minus operating expenses
Net Cash Flow - NOI minus Tenant Improvements & Leasing Commissions
and 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
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.
Industrial
and Warehouse
Financing Permanent Loan Amounts - $25,000 - $1
Billion
- Fixed
Rate Retail Property Loans 5.54
- 8.65%
- Variable
Rate Loans for Retail Properties 4.91
- 6.25%
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:
Also see Balloon Mortgage for
Variable
Rate & Cap Rate.
Please
see the Commercial Only Glossary
(see Commercial Glossary)
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