Commercial Mortgages

This category includes the following types of real estate:

Industrial buildings

Office buildings

Retail malls

Mixed-use properties


The location, quality and historic performance of the property are important attributes in arranging a new or replacement mortgage. These types of real estate are generally less appealing to the lending community than apartment building mortgages because of the perception that the cash flows from these property types are more variable from year to year.


Industrial Properties

The lending community prefers multi-tenant industrial properties over single-tenant properties. Single tenant buildings must be (i) occupied by a creditworthy tenant, and (ii) have a reasonably long remaining term on their lease in order to secure the most competitive mortgage rates.


Office Buildings

A higher quality building, as well as a list of quality tenants with staggered lease maturities (or long term leases) is important in order to obtain an aggressive financing offer. Single tenant buildings tend to be more difficult to finance unless the tenant is known, financially sound and the lease is long-term.


Retail Malls

Strip malls, power centres, and regional malls are the most popular categories within the retail sector. Ideally, the anchor tenants are committed to leases which extend well beyond the proposed term of the mortgage. In addition, the anchor tenants must be creditworthy and show an adequate level of sales in order to justify the lease rates being paid.

 


Mixed-Use Properties

 

This type of real estate is almost always more complicated to analyze and is slightly more difficult to arrange financing with Lenders. Usually a Lender will value each of the components independently in order to establish an overall lending value. The age of the property and relative success of each component will in large part determine the reaction from the lending community.

 


Financing Terms Available:

 

Loan Amounts

the loan amount can range from 65 to 80% of the appraised value, depending on the quality of the property.

Interest Rates

both fixed and floating interest rates are generally available

Terms

1 to 20 years.

Amortization

up to 30 years.

Minimum Debt Service

1.30 or greater.

Non-Recourse or Limited Recourse

The level of recourse (if any) is largely dependant on the risk profile of the loan.

 

Sourced from http://www.cmcapitalcorp.com/v2/mortgage/commercial_financing.asp

 

 

Aaron Wright
Sales representative
CENTURY 21 UNITED REALTY INC.
387 George ST. S P.O. Box 178
Peterborough ON, K9J 6Y8
Direct: 705.760.1835
705.743.4444 | Fax: 705.743.9606

www.thewrightprice.com

Aaron Wright

Aaron Wright

Sales Representative
CENTURY 21 United Realty Inc., Brokerage*
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