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RealWebFunds finds financing for all types of single tenant buildings including retail, industrial,
restaurant and all types of franchises. We offer financing for buildings with both credit tenants (those with
BBB+ or better credit ratings) and non-credit tenants. We know which lenders offer the best terms
for your NNN leased properties and we know how to get them to give you their best offer (not something
they usually do without competition). If you have a 1031 exchange to get done, we know how to get
the loan done on your schedule.
Typical Single Tenant, NNN, Property Financing Terms
| Note: These are not terms of any specific lender. They represent terms that
we frequently see in the marketplace and are not to be relied on as a commitment to provide
any specific terms for any specific deal. |
| Debt service coverage: |
Credit tenant: as low as 1.03 times net operating income
Non-credit tenant: 1.25 times net operating income |
| Maximum loan to value: |
Credit tenant: "up to 100% LTV" (this is usually limited by the debt coverage ratio to around 85%)
Non-credit tenant: around 75% LTV |
| Term: |
5, 10, and 20 year terms and terms coterminous with lease are most common. |
| Amortization: |
25 or 30 years |
| Typical Rates: |
Credit tenant: 10 year fixed = 10 yr US T-bill + 1.1% to 2.0%
Non-credit tenant: 10 year fixed = 10 yr US T-bill + 1.7% to 3.0% (lowest for retail, highest for restaurants)
5 year fixed rate and adjustable rate loans are also available at attractive rates.
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| Prepayment terms: |
Prepayment based on "yield maintenance" or "defeasance". This kind
of prepay can make it prohibitive to refinance or sell the property (prepayment fees can easily exceed 10% to 15% of the loan).
5 yr fixed rate loans - typically have a decreasing prepayment each year (e.g. 5%, 4%, 3%, 2%, 1%).
Adjustable rate loans - typically have a decreasing and smaller prepay (e.g. 3%, 2%, 1%).
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| Lease term: |
Generally the lease must be 10 years or longer. |
| Recourse: |
Typically non-recourse. |
| Closing costs: |
Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc)
- Loans under $3M - costs range from $6,000 to $12,000
- For loans over $3M - costs can be $20,000 or more
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Information You Will Need For Your Application:
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Recent NNN Mortgage Loans
$6M fixed rate loan for a
NNN Leased Waterfront Restaurant
$2.1M fixed rate loan for a
30,000 s.f. NNN leased light industrial building
$950K fixed rate loan for
NNN franchised restaurant
$1.85M Financing For
Non-Credit Tenant NNN Restaurant
$2.685M fixed rate loan for
two NNN franchised restaurants
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