Commercial Property Mortgage Loans

RealWebFunds is an expert at finding the best long-term financing for commercial properties including, retail, office, industrial and mixed-use properties. We present your loan request to up to 30 lenders to find the lenders who are most willing to compete for your loan. Each commercial lender has a slightly different need for their portfolio at any single time. We find the lenders who are looking for a project just like yours right now - and therefore, are willing to stretch to get your business.

Typical Commercial Mortgage Loan Rates (for loans over $2,000,000) Loan to Value (%) 50 60 70 80 10 yr fixed 6.1 6.1 6.3 6.5 5 yr fixed 5.9 5.9 6.1 6.3 3 mo ARM 5.4 5.4 5.6 5.8 More rates...

Types of Commercial Real Estate Lenders We shop loan requests to all types of commercial lenders including: Conduit Lenders Life Insurance Companies Banks Investment Banks And more

Typical Commercial Property Financing Terms (e.g. retail, industrial, office)

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.

Maximum loan to value:	Most lenders will loan up to 75% of value or cost (whichever is lower). For loans under $2M, there are a few lenders who will go to 80% or 90% or will allow secondary financing for a combined loan to value of 85% to 90%. For long term fixed rate loans a small "mezzanine" piece can be added to the loan to yield an 80% to 85% LTV.
Debt service coverage:	The cash flow from operations must be at least 1.25 times the mortgage payment.
Term:	5, 10, 15 year terms are most common.
Amortization:	20, 25 or 30 years if building is in good repair. Typically 15 and 20 year loans are full amortizing.
Typical Rates:	10 year fixed = 10 yr US Treasury bill rate + 1.1% to 2.0% 15 and 20 year fixed = 10 yr Treasury + 1.6% to 2.5%> 5 year fixed = 5 yr Treasury + 1.6% to 2.5% ARM = LIBOR + 1.7% to 2.5%
Prepayment terms:	10 year fixed rate loans - typically have 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%).
Allowable vacancy:	Generally lenders expect the vacancy to be near the local market vacancy. This is generally in the 5% to 10% range.
Recourse:	Longer term loans (typically from life insurance companies or conduits) are generally non-recourse. Bank loans are typically 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

Information You Will Need For Your Application:

• Retail Building Loans
• Office Building Loans
• Industrial Building Loans
• Mixed-use Property Loans

Recent Commercial Real Estate Loans