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| | Single-Tenant,
Non-Investment Grade Properties
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Many borrowers own properties that are rented to a single
tenant, but the tenant is not a rated , or investment grade, tenant.
Traditionally, these properties were very difficult to finance. They were
not Credit Tenant deals, so they did not qualify for that program, and they were
not multiple tenant properties, so they did not qualify for Conduit
financing. Now, Bond Street Capital has a loan program for those
properties. The tenant will receive heavy scrutiny, to make sure they are
a viable company. If the company appears financially strong, borrowers
with these types of properties now have a loan program just for them.
Here are the basics of this program:
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Loan Amounts: |
Minimum
$5,000,000 |
|
Qualifications: |
Existing,
stabilized, income-producing properties with strong tenancy in primary
real estate markets.
|
|
Property Types: |
Office
Retail
Industrial
No healthcare,
assisted living properties or restaurants.
|
|
Term: |
10-year term is
standard (exceptions made on a case by case basis). Can structure 5-year
term or 7-year term. The entire spread is added to the corresponding
5-year, 10-year or interpolated 7-year U.S. Treasury. |
|
Index: |
10-year U.S. Treasury for
10-year loan term
7-year interpolated U.S.
Treasury for 7-yr. term
5-year U.S. Treasury for a
5-year loan term.
|
|
Spread: |
Call for pricing.
Since every business is
different, the spread will depend on the strength of the tenant.
|
|
Amortization: |
Up to 30-years
|
|
Loan-to-Value: |
Up to 75%
|
|
Minimum DSCR: |
1.25x
|
|
Typical Closing: |
45 – 60 days
from receipt of executed application and Good Faith Deposit.
|
|
Origination Fee: |
Call for pricing
|
|
Recourse: |
Non-recourse
except for standard carve-outs for "bad boy" acts and
environmental. |
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Prepayment: |
Defeasance
only. Open to prepayment during last 60-days of loan term.
|
|
Assignment / Assumption: |
One-time option
only with BSC's consent and payment of 1.00% fee (based on outstanding
principal loan balance) and BSC’s transaction costs.
|
|
Required Escrows: |
Real estate
taxes, insurance, replacement reserves, capital improvement reserves
& tenant improvements and leasing commissions (when applicable). |
|
Required Reports: |
MAI Appraisal
Phase I Environmental
Assessment Report Physical Condition Assessment Report
Agreed Upon Procedures (AUP).
All reports to
be ordered by BSC and prepared by approved vendors only.
|
|
Special Underwriting Criteria: |
In addition to standard conduit
underwriting criteria, strong emphasis will be placed on the following:
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Heavy balance sheet
analysis - must be confident that tenant has a sound business, has
made money historically, has enough cash reserves and will continue to
be profitable going forward.
-
Property must be located in
a primary market that is both strong and active; no secondary markets.
-
Tenant’s space must be
fungible and easily re-let if tenant vacates.
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Suite 402