At TrueRate, we represent property owners, companies and individual investors, who are in the market to acquire commercial real estate assets in the United States. We are experts in understanding lender and investor preferences, and work with the industry’s leading financial institutions to help you secure optimal terms on your next acquisition.
Most investors will refrain from acquiring a commercial property without applying for a mortgage loan to purchase the property. For many, all-cash acquisitions are both undesirable and unattainable. Time value of money principles state that due to inflation, your money will inevitably decrease in value over time if you fail to put it to effective use. By purchasing a property with only equity, a borrower may lose the opportunity to leverage a smaller percentage of their holdings and access a wider pool of capital (through debt) while preserving the ability to allocate the remainder of cash to their current expenses or even other investments. Borrowers see the growth potential that loans have for their businesses and as a result, frequently inquire with brokers for financing guidance. Just like residential real estate and home mortgages, an acquisition loan is the most ideal outcome for a commercial real estate buyer.
TrueRate specializes in advising investors on the optimal financing sources and executions for their commercial real estate acquisition needs. This includes bridge and permanent funding for the acquisition of multifamily properties, hotel buildings, industrial spaces, retail and office spaces, among other asset types. See below for the various mortgage financing options offered by our lending partners.
Investors have a variety of financing options available to them when it comes to multiple-unit properties such as apartments, affordable housing, student housing, mobile home parks, and senior housing. TrueRate advises multifamily investors on the appropriate financing option in order to maximize the results of their business plan. This includes weighing terms such as: recourse versus non-recourse, fixed rate versus floating rate, amortization periods, and leverage points.
Industrial real estate assets include properties such as warehouses and distribution centers, manufacturing plants and factories, cold storage and refrigeration, data housing centers, and flex buildings. Industrial properties are built with specific uses and tenants in mind, and lenders are often particular about the markets in which they invest. TrueRate advises industrial property investors on optimal execution routes, which include bank financing, debt funds, CMBS, and life companies.
Investors looking to capitalize on the acquisition of retail property types such as grocery-anchored shopping centers, single tenant retail buildings, strip malls, commercial shopping centers, and big box retailers will likely see a high degree of variability when seeking acquisition financing. TrueRate advises retail investors on how to maximize the results of their financing based on their leasing structure as well as the credit profile of each retail center’s tenants.
Acquisition loans are available for investors looking to purchase flagged, boutique, resort-style, event centers, and specialized hospitality venues. Permanent loans are available for the acquisition of existing hotels with stabilized cash flow, whereas bridge loans are more common for hospitality assets that are undergoing an operational lift.
TrueRate has experience working through dynamic and complex acquisition loan opportunities for: suburban office parks, high-rise office buildings, and medical office buildings. Like retail and industrial, office financing terms and lenders are highly sensitive to leasing structure and tenant credibility. Given the changing landscape of office use and corporate workflow, we leverage our extensive network of capital providers to empower borrowers and find them optimal financing solutions through trusted counterparties.
Bridge financing options are short-term acquisition loans that are primarily used when investors plan on executing a business plan to alter the asset and increase the property’s value. This could be either a value-add play, in which capital is invested in order to improve property amenities or operating infrastructure, or a transition, where the property is completely transformed from one asset type to another. Alternatively, a borrower might require bridge financing when they are operating on a compressed timeline, are unable to complete the due diligence that a permanent loan would require and thus, forced to close quickly. A common cause of this is the 1031 exchange, wherein borrowers are given tax incentives to close on acquisitions before certain deadlines. Other situations such as credit or legal issues may require borrowers to purchase properties with bridge loans given the flexibility of program requirements.
If an investor is purchasing an asset to hold for a given length of time, they may opt for a permanent loan execution that finances the asset for a period of 5 years or more. Additionally, if a property is stabilized, meaning it is generating cash flow similar to comparable properties in the market, borrowers generally do not believe executing a value-add business plan would yield a higher property value in the short term. Since loan terms are generally more attractive for stabilized properties, borrowers are going to opt for a permanent financing vehicle.