Commercial real estate loans are used for the purchase, refinance, renovation, or expansion of commercial properties. The different types of commercial properties are:
Commercial real estate loans are often made to businesses, corporations, developers, funds, or real estate investment trusts, also known as REITs. Investors who request commercial real estate loans are typically looking to leverage their funds and access a wider pool of capital for the purpose of owning and operating commercial real estate.
Commercial real estate loans utilize a similar approach as residential mortgage loans - the loan is secured by a lien against the commercial property and the lien is removed by the lender once the loan is paid off.
There are various types of commercial real estate loans for borrowers to consider as financing options. Our team is well equipped to arrange a myriad of loans for our clients.
This includes executions such as:
and property types such as:
Permanent loans are typically used to purchase or operate fixed assets and have a term of five years or more. The main advantages of this loan type are that they tend to involve lower risk properties, lower interest rates, and amortization periods of up to 30 years.
Hard money loans, also known as private money loans, are typically provided by companies or individuals, rather than banks, and are more expensive (higher interest rates), more risky, and a last financing resort for some. On the other hand, hard money loans close faster than traditional bank loans and are more flexible when it comes to the borrower’s credit history.
More about Hard Money Loans →
Bridge loans are a short term financing tool that borrowers use for properties or business plans that are unable to qualify for permanent or long-term financing. These include properties in transition, ground-up developments, and heavy value-add executions.
More about Bridge loans →
Mezzanine loans are supplemental loans that borrowers use to increase overall loan proceeds in a transaction. They bridge the gap between debt and equity, ensuring that the borrower retains a strong ownership stake in the deal while also maximizing the full loan potential of their property.
More about Mezzanine loans →
CMBS Loans, which stands for Commercial Mortgage Backed Security Loans, are loans that are pooled together with other commercial mortgages to be sold on the secondary market. CMBS loans boast flexible credit requirements, offer up to 85% loan to value, and are available for most property types - including self-storage, medical offices, and student and senior housing.
More about CMBS loans →
FHA (Federal Housing Administration) Loans, also known as HUD (U.S. Department of Housing and Urban Development) Loans, are programs that are in place to stimulate multifamily investment and development. These loan types offer favorable rates, optimal leverage points, and customization from a term and amortization standpoint.
More about FHA and HUD loans →
Office loan structuring is largely dependent on the tenants that occupy an office building. Underwriting and terms are likely to differ amongst buildings that are owner-occupied, single-tenant, and multi-tenant.
Multifamily investment loans commonly come in the form of Fannie Mae and Freddie Mac agency financing. These vehicles are ideal for the purchase or refinance of a multifamily property, offering competitive fixed and floating rate terms.
Industrial loans are perfect for any construction, acquisition, or refinancing of industrial assets. These assets include but are not limited to: factory units, industrial warehouses, manufacturing plants, last mile facilities, and other industrial facilities.
Construction Loans for commercial real estate typically come in two forms: short-term financing and construction-to-permanent financing, or what many would call a takeout loan. This can be for the purpose of construction projects on properties ranging from industrial warehouses to offices, housing developments, shopping centers, and other real estate property types.
More about Construction loans →
The commercial real estate loan process is broken out into several steps: first, financial documents and background information are provided for a specific property or project as well as all parties who have an ownership stake in the deal. Once this information has been gathered, lenders underwrite the deal, analyze all of the potential associated risks, and request any additional information from the borrower. Upon preliminary approval, the lender provides the borrower with a term sheet, kickstarting the due diligence process. Here, the lender orders third party reports such as appraisals, environmental, zoning, and PCA (Property Condition Assessment), and submits the deal to their respective credit committee for final approval.
Our skilled team has arranged financing for all major commercial real estate property types. This includes: multifamily, office, hospitality, industrial, retail, mixed-use, new construction, cannabis, land, among other executions. TrueRate integrates automation at every stage of the CRE Cycle - including the use of APIs and live, dynamic nationwide transaction data. By speeding up the process of deal underwriting and getting out-to-market, we are able to maximize cost savings for our clients and enable the most effective transaction process for a quicker close.
First, financial documents, and background information, and all parties who have an ownership stake in the deal are provided. Next, lenders underwrite the deal and provide the borrower with a term sheet. Lastly, the lender orders third party reports and submits the deal to their respective credit committee for final approval.
Permanent loans are typically used to purchase or operate fixed assets and have a term of five years or more. On the other hand, bridge loans can fill a borrower’s short term financing needs and generally last from anywhere between one and three years.
Commercial real estate loans come in all shapes and sizes. Executions include, but are not limited to, permanent loans, hard money loans, bridge loans, mezzanine loans, FHA/HUD loans, construction loans, and CMBS loans. These can be used on property types such as multifamily, office, hospitality, industrial, retail, mixed-use, new construction, cannabis, land, and many more.
