Commercial Loans

Office	Retail
Interest Rate Range: 5.65 - 8.25% How to get the best rate >> Cap Rate: 9.3% to 9.7% Best Rates are associated with: Properties with >1.25 DSCR, <75% LTV, <10% vacancy, appropriate TI/LC, Cap Ex reserves Issues: Owner-occupied properties - leases are marked-to-market, using market rent Staggered lease expirations should display no TILC deficiencies during loan term Spreads are typically lower for properties exhibiting a stabilized Trailing 24-36 Month Net Cash Flow Net Cash Flow calculations include Replacement Reserves Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Tenant Improvements & Leasing Commissions and Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request	Interest Rate Range: 5.65 - 8.85% How to get the best rate >> Cap Rate: 8.9% to 10.2% Best Rates are associated with: Properties with >1.25 DSCR, <75% LTV, <8% vacancy, appropriate TI/LC, Cap Ex reserves; spreads are typically higher for unanchored retail Issues: High credit, national chains and build to suit properties have been very competitive in the marketplace Tenant diversification continues to be scrutinized Non-credit single-tenant properties are under close watch Spreads are typically lower for properties exhibiting a stabilized Trailing 24-36 Month Net Cash Flow Net Cash Flow calculations include Replacement Reserves Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Tenant Improvements & Leasing Commissions and Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request
Industrial	Multifamily (5+ Units)
Interest Rate Range: 5.75 - 8.75% Coming Soon! >> Cap Rate: 9.7% to 11.2% Best Rates are associated with: Properties with >1.25 DSCR, <70% LTV, <7% vacancy, appropriate TI/LC, Cap Ex reserves Issues: Owner-occupied properties - leases are marked-to-market, using market rent Flex/Multi-tenant - Staggered lease expirations should display no TILC deficiencies during loan term Spreads are typically lower for properties exhibiting a stabilized Trailing 24-36 Month Net Cash Flow Net Cash Flow calculations include Replacement Reserves Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Tenant Improvements & Leasing Commissions and Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request	Interest Rate Range: 5.25 - 7.35% How to get the best rate >> Cap Rate: 7.6% to 9.1% Best Rates are associated with: Properties with >1.20 DSCR, <80% LTV, <5% vacancy, appropriate Cap Ex reserves Issues: Spreads are typically lower for properties exhibiting a stabilized Trailing 12-24 Month Net Cash Flow Net Cash Flow calculations include Replacement Reserves ($250-$300/unit) Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request
Mobile Home Park	Hotel
Interest Rate Range: 5.50 - 8.75% Coming Soon! >> Cap Rate: 7.9% to 10.2% Best Rates are associated with: Properties with >1.20 DSCR, <80% LTV, <5% vacancy, appropriate Cap Ex reserves Issues: Spreads are typically lower for properties exhibiting a stabilized Trailing 12-24 Month Net Cash Flow Net Cash Flow calculations include Replacement Reserves ($50-$75/pad) Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request	Interest Rate Range: 6.25 - 12.0% How to get the best rate >> Cap Rate: 7.9% to 11.8% Best Rates are associated with: Properties with >1.75 DSCR, <65% LTV, >60% occupancy, market ADR, appropriate reserves for FF&E, Franchise Fees, Advertising & Marketing, Repair & Maintenance Issues: "Mom & pop" operators are being scrutinized Non-flagged hotels have an adverse view Spreads are impacted by variance from market ARD and Occupancy Many lenders are underwriting to a Max. Occupancy of 75% Net Cash Flow calculations include FF&E, Franchise Fees, Advertising & Marketing, Repair & Maintenance Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Historical ADR & Occupancy Departmental Revenue, Departmental Income, Total General Expenses, Operating Expense Ratio Net Operating Income - Departmental Income minus Total Expenses Net Cash Flow - NOI minus FF&E and extraordinary cap ex Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request
Healthcare	Self Storage
Interest Rate Range: 6.65 - 10.15% Coming Soon! >> Cap Rate: 9% to 12% Best Rates are associated with: Properties with >1.50 DSCR, <70% LTV, <5% vacancy, appropriate Cap Ex reserves Issues: This sector has the highest delinquency rate of all property types Net Cash Flow calculations include Replacement Reserves ($250-$275/bed) Scrutinize Private Pay vs. Medicare/Medicaid and property management experience Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request	Interest Rate Range: 5.90 - 8.55% Coming Soon! >> Cap Rate: 8.9% to 10.2% Best Rates are associated with: Properties with >1.25 DSCR, <75% LTV, <7% vacancy, appropriate Cap Ex reserves Issues: Certain markets have been over built Higher vacancies are being tied to the overall sluggish economy Single-story properties are favorable, multi-story properties are adverse Property management and experience is being scrutinized Net Cash Flow calculations include Replacement Reserves Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request
Mixed Use
Interest Rate Range: 6.70 - 12.5% Coming Soon! >> Cap Rate: 8.25% to 13% Best Rates are associated with: based on property components; properties with >1.40 DSCR, <70% LTV, <5% vacancy, appropriate Cap Ex reserves Issues: Analyze economic value of each property component income stream independently Tenant diversification continues to be scrutinized Net Cash Flow calculations include Replacement Reserves and TILC where applicable Lenders may reconcile property value using the Direct Capitalization Approach on NOI and NCF General Required Calculations: Rent Roll illustrating in-place occupancy and Potential Gross Income Effective Gross Income - Potential Gross Income minus the greater of underwritten or market vacancy Net Operating Income - EGI minus operating expenses Net Cash Flow - NOI minus Tenant Improvements & Leasing Commissions and Capital Expenditures Debt Service Coverage Ratio - NOI divided by Annual Debt Service Cap Rate - should be applied to the stabilized income stream to estimate direct capitalized value to support loan request