Hi Everyone,
I'm looking for some good commercial loan advise. We are purchasing a newly constructed shopping center that is occupied with 90% of the best national tenants and 45% of them have ten year leases. Prime A quality property. The property is $7.5mm and we will be putting $2.5mm down.

We are uncertain on the type of loan we want; conduit, non-conduit, we even heard of a 15 year fixed self ammortizing loan. We also are not to concerned of cash flow.

Any insight, recommendations, and rates we would be looking at??

Thank you,
Sean

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We can help you out with your problem. We have lenders that will help you with your fiancial solution.

Conduits will give you the best rates and terms. You're probably looking at rates somewhere between 100 to 250 basis points above 10-year treasuries. Sorry I can't be more specific on rates because it depends on leases, tenants, etc.

Thank you.
But aren't conduits very restrictive,i.e. prepayment penanlties...

Yes they are but what's your concern with PPP? These properties are usually sold with existing loans so the buyer assumes the loan payments.

You will not get a loan without PrePays. Thats just a fact. The down side of counduits is that they are expensive i.e. engineering fees etc. There are plenty of options out there, you first have to define your future plans. What do you want to do with your property; buy and hold or sell in near future etc. What terms you end up with depend on your goals. We just closed a strip mall in MA where we invoked a retail mortgage REIT to fund the transaction and it work out great. The NOI and perhaps the credit of the tenants may be important. The next step is for you to define the variable you can bend on and the ones you will not bend on. Take that list to a compentent mortgage broker and you will have your answer.

Not sure if you are still in the market, but you should know that you can use a conduit without prepayment penalties, it is made up for in the rate, but certainly structured finance can overcome something as simple as PPP issues. Also, buying newly completed property that is 90% full is what fixed rate, non-recourse finance is for. Depending on the purchase price and the property, you can get into a building like this with as little as 10% down. As for the cost of the transaction, they are part of the project const and can be financed. Depending on the size of the transaction, there are fixed cost loan programs and as the project become larger, the conduit/life product out there are proportionally the same as local bank programs that will be more conservative on loan proceeds, higher in rate, and likely require elements of recourse.

Good luck.