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CREDIT TENANT LOAN

 

A credit tenant loan (CTL) is a real estate loan that is secured by the obligation of a single investment grade company to pay debt service by means of rental payments under a high quality lease or through a recourse loan obligation.

Requirements for a credit tenant loan include investment grade tenant, fully amortizing preferred, or up to 35% of the loan balloon, and bond, absolute net, or double net lease. Typical attributes of a credit tenant loan include debt service coverage as low as 1.0x-1.05x rent (depending on lease quality), and high loan-to-value ratios based on MAI appraised value. CTL also includes potentially all property types and uses, depending on the strength of credit tenant. Physical condition assessments are required for double net leases only and seismic reports are required in areas with seismic risk. While transaction ratings and specialty insurance to cover casualty and condemnation risk is not required, phase I environmental and MAI appraisals are required. CTL prefer locations in primary and secondary markets, but may permit tertiary markets depending on credit quality. Investment grade tenants can be public or private companies, national or regional in operation, and must have the ability to get audited financial statements.

A credit tenant loan is $2 million and up and can rate lock at application. CTLs are fully amortizing or covered balloon exposure at maturity. Special purpose entity or single asset entity is preferred, but not mandatory, as well as trustee structure, depending on each transaction. Construction permanent loan capabilities have different guidelines, with up to 18 months for construction period and a minimum loan of $7 million. A long-term credit tenant loan program enables a borrower to receive the highest loan proceeds that a property’s rent payments can handle. The fixed rent payments defined in the lease generally amortize the greater part of the balance of the loan during the term of the lease, which is usually 20 years. A single-tenant lease property’s qualifications are similar to CTL’s program, but the tenant should be rated BBB- (Standard & Poor’s) or Baa3 (Moody’s) or better. Credit tenants with BBB- or Baa3 ratings may also qualify for financing. Special provisions may be available to facilitate sales.

At Ocean Pacific Capital, for over 31 years, we have understood the commercial financing industry inside and out. Please give us a call today at 1-800-595-1474 or fill out our online commercial application.


Whatever your financing needs,
we will tailor a loan that's right for you.

 



Daily Oil & Gas and Wall Street Journal News
5/25/17

BLOG: OFS Crew Cuts May Shave Near Term US Crude Oil Production Growth
Posted on Wednesday May 24, 2017

Rebuilding the completion crew workforce at US shale plays will take time, likely to slow North American crude oil production.

Former House Speaker Boehner: Trump 'Still Learning How to be President'
Posted on Wednesday May 24, 2017

John Boehner delivers a fierce keynote in which he shares his view on Trump's presidency, whether or not he'd consider running for president and of course, Russia.

TECH SHOWCASE: 'End to End' Molecular Fuel Marking
Posted on Wednesday May 24, 2017

This chemical technology binds to molecules to detect adulterated fuels and crude oils.

A Tiny Island Off Singapore May Hold Keys to Energy's Future
Posted on Wednesday May 24, 2017

A hydrogen-based energy storage system costs about 10 times more than a diesel back-up generator with similar power output, according to Toshiba Corp.

Venezuela's Secret Plot to Sell Banned Syrian Oil in US Market
Posted on Wednesday May 24, 2017

The plan reportedly aimed to sell discounted Syrian oil to Venezuela through a Russian shell company, which would send it to Aruba for refining and distribution to US gas stations.

GE's Saudi Joint Venture To Start Gas Turbine Production This Year
Posted on Wednesday May 24, 2017

General Electric's joint venture to manufacture gas turbines in Saudi Arabia will start production by the end of the year.

Austria's OMV Says Iran Owes It $48 MM
Posted on Wednesday May 24, 2017

The National Iranian Oil Company (NIOC) still owes Austrian oil and gas group OMV $48 million, OMV's exploration and production chief Johann Pleininger says.

Nigeria Oil Min Says Not Opposed To Eventually Joining Output Cuts
Posted on Wednesday May 24, 2017

Nigerian Oil Minister Emmanuel Ibe Kachikwu says Nigeria was not opposed to joining OPEC production caps but would have to wait and see if production came back to acceptable levels.

Energean Signs Lease Agreement for Exploration Onshore Greece
Posted on Wednesday May 24, 2017

Energean Oil & Gas signs a Lease Agreement with the Greek government for the exploration and exploitation of hydrocarbons at the Aitoloakarnania block, onshore Western Greece.

EnQuest On Track For Kraken First Oil Before End of June
Posted on Wednesday May 24, 2017

EnQuest is on track to achieve first oil from the Kraken development in the UK North Sea before the end of June, according to the company's CEO Amjad Bseisu.

Wall Street Journal
Commercial News

5/25/17

WSJ.com: Commercial Real Estate

China Life Buys Sprawling Portfolio of Small Market U.S. Real Estate
China Life Insurance Group is buying a 95% stake in 48 commercial properties scattered throughout the U.S. in deal that values the portfolio at $950 million and highlights the growing appetite among foreign investors for real estate in markets they mostly have ignored until now.

As Lower East Side Gentrifies, Condo Offers Sprawling Private Garden
Trees, tree house, hilly path, fire pits, telescopes: The One Manhattan Square condo building on the Lower East Side takes the private-garden amenity very seriously.

New Jersey Ski Resort Files for Bankruptcy
Mountain Creek Resort Inc., a New Jersey ski resort less than two hours from Manhattan, has filed for bankruptcy protection, citing years of above-average temperatures, scant snowfall and missteps by prior owners.

What's Behind GE's Move From the Connecticut Suburbs to Boston
Chief Financial Officer Jeffrey Bornstein says being near students was a major attraction

Apple Headquarters Signals Tech's Boom, Bravado
Apple Inc.?s new headquarters in Silicon Valley is the most lavish in a spate of glitzy new architectural projects by tech titans at a time when their businesses are booming and market valuations are soaring.

New York Landlords Roll Out Freebies to Attract Tenants
Manhattan office landlords are boosting their use of concession packages such as free rent and remodeling cash to entice tenants to take space.

NYC Picks Development Team for West Side Mixed-Use Tower
The New York City Economic Development Corp. has tapped a development team to transform a far West Side parking lot into a mixed-use tower with affordable housing, offices and dormitories.

BRE #:00619059
Charles Elfsten, President
Charles A. Elfsten
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