Posts Tagged ‘bondable’

Money Available for Walgreens Credit Tenant Lease (CTL) Loans – Special Low Rates for Loans against Portfolios (3+ Locations, $15MM+ Loan Balance)

September 19, 2011

Commercial real estate investment banking firm, MasterPlan Capital LLC is actively seeking to fund credit tenant lease (CTL) loans against stand alone, net leased, Walgreens stores. The firm has significant but limited liquidity for Walgreens loans and specifically is looking to make loans of $15MM or more against portfolios of 3 or more Walgreens locations that can be cross collateralized. Sponsors, owners, developers and investors can inquire or apply for CTL financing online or may call 800-727-5140 xtn 1.

Loan:                 First Position Commercial Mortgage
Recourse:          Nonrecourse
Type:                  Fixed Rate, Full/Self Amortizing
Rate:                   Interpolated US Treasury Rate + Margin
Minimum:         $3MM (prefer $15MM+)
LTV:                    To 100% (subject to DSCR)
DSCR:                  1x-1.05x 
Term:                   Co-Terminus with Lease
Assumable:         Yes
Time to Close:      45-60 Days
Funding:                Private Placement Bonds

Why Credit Tenant Lease (CTL) Loans Have Been Closing While Traditional Lending has Faltered

August 5, 2011

Throughout the credit and liquidity crisis that started several years ago and continues today, credit tenant lease (CTL) lending has remained relatively healthy. Indeed, CTL has been a welcomed bright spot in commercial real estate finance. CTL bankers never lost their appetite for originating loans and never lacked the liquidity it takes to fund them.

Why is it that CTL finance is able to thrive while almost all other forms of lending continue to struggle? There are several factors that contribute to the resiliency of CTL.

First is the fact that CTL loans are only made against real estate that is net leased (triple net [NNN], double net [NN] or bondable) on a long term basis to a single very stable, very strong corporate tenant. To qualify for a CTL loan a building or plot of land must be net leased to what is known as an “investment grade” or “credit” tenant. A credit tenant is one that enjoys a credit rating of BBB+ or better from the rating agency Standard & Poors and/or Ba1 or better from Moody’s. Because CTL loans only deal with strong tenants there is less risk to lenders and, subsequently, deals are easier to close.

Click Our Logo to Apply for A Credit Tenant Lease (CTL) Loan

Another factor that contributes to the strength of the CTL market is the fact that virtually all CTL loans are non-recourse. The borrowers finances will be checked out to see if they have enough money to pay any required closing costs but borrowers are not underwritten and won’t be on the hook if a loan defaults. Because lenders are not overly concerned with the financial strength of the borrower there are less things that can crop up and derail the lending process. Basically, if the lease and the tenant pass muster a loan will close.

CTL is a very straight forward process. Experienced CTL bankers know what will work and what will not. Because the private placement bonds that fund CTL loans are sold to insurance companies, pension funds, trusts and commercial banks, there are very strict criteria for qualification with no wiggle room or discretion allowed. Most CTL lenders will be able to tell you if a deal is doable after just one reading of the lease and they only accept deals they know they can get funded. If a CTL banker issues a letter of intent or term sheet for a deal, you can count on financing with a very high degree of confidence.
The standardized nature of CTL loans means that borrowers can get a definitive yes or no very quickly, and if the answer is yes they can count on funding.

Finally, the last reason for the relative health of the CTL market is that CTL lending and net lease investing is not necessarily correlated with traditional lending or regular real estate investing.

CTL lending is, in reality, a specialized form of commercial real estate investment banking. Investment bankers that make CTL loans fund deals by creating securities and selling them to investors, not by loaning capital or selling mortgages to Fannie Mae or Freddie Mac the way banks do.

Net lease investing (especially single tenant, NNN lease) is not the same as traditional real estate investing. In-fact net lease investing is actually a sophisticated form of fixed income investing. Traditional real estate investing typically involves running and managing a property or otherwise adding value to a transaction (such as refurbishing). Most net lease investors don’t have any landlord responsibilities or any physical or emotional connection to the real estate at all; most have never even visited the buildings they own. They buy and hold for the monthly income that a lease produces; they look at their real estate the same way other income investors look at bonds.

All this is to say that net lease investing and the CTL finance that goes along with it is a niche market and is much less affected by liquidity problems at banks or the ups and downs of the traditional real estate markets. This non-correlation allowed the CTL finance sector to continue to grow and thrive while the rest of the world experienced a severe shortage of capital.

There is no liquidity crunch in CTL finance. Investors with property that is net (NNN, NN or bondable) leased on a long term basis to a single, investment grade tenant will find that they have a dependable source of capital available to buy, refinance or build their real estate projects.

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Credit Tenant Lease Lending Criteria – Large Fixed Income Fund Looking to Fund CTL loans – Here’s What’s Needed to Qualify

June 27, 2011

Commercial Mortgage Lender, MasterPlan Capital LLC, is corresponding with a large ($20b) fixed income fund that is actively seeking to fund credit tenant lease loans against single tenant, net leased real estate. Transactions that fit the criteria (below) can fund in as little as 45 days.

Loan: Commercial Mortgage, Purchase or Refinance
Collateral: Stand Alone, Single Tenant, Net Leased Real Estate
Type: Office, Retail, Warehouse, Distribution Center, Data or Light Industrial
Lease: Triple Net (NNN), Double Net (NN) or Bondable, 10yr +
Tenant: BBB+ (or better) by S&P or Ba1 (or better) by Moody’s, or Equivalent.
Term:  Co-Terminus with Lease
Amortization: Full, Self Amortizing
Rate: Fixed, Interpolated US Treasury + Small Margin
Recourse: Non-Recourse
LTV: No Restrictions on LTV (To 100% LTV subject to DSCR)
DSCR: 1.05x
Minimum: $5,000,000.00
Maximum: Virtually No Maximum

Click Here / Apply for A CTL Loan or call 800-727-5140 x 101

 

Credit Tenant Lease Loan Rates Down in Correlation with US Treasury Bonds – Rates in the 4%s or Lower for Best Tenants

June 13, 2011

US Treasury Bond rates have been trending down lately (See chart below).

As many of you know, credit tenant lease loans are priced based on an interpolated Treasury Bond yield plus a small margin spread. When T Bond rates go down CTL rates go down with them.

T Note Yield

10 Year US Treasury Note 6/13/11

Mortgage rates on buildings with the best tenants with long-term, NNN, NN or bondable leases are being priced in the mid 4% range (+/-) or even lower.

With the fed contemplating the end of QE2 and the credit worthiness of the USA continuing to deteriorate, rates are sure to start to rise sometime. Investors with single tenant, NNN assets leased to credit worthy tenants would do well to refinance (or buy more) now while rates are very reasonable. They won’t be forever.

Credit Tenant Lease (CTL) Loans – Lower Overall Costs When Sponsors Borrow From Portfolio Lenders

May 25, 2011

Credit tenant lease (CTL) finance is an investment banking solution for the capital needs of single tenant, net lease real estate investors. Specialized lenders, in effect, turn triple net leases into bonds and use the proceeds from the bond issue to fund a commercial mortgage loan. Credit tenant lease loans tend to be long-term (co-terminus with the lease), fixed rate, non-recourse, self amortizing loans, and because they are usually assumable by a subsequent owner they are often the last loan a property will ever need.

CTL is an efficient and dependable method of financing the purchase or refinance of net leased property but it is not inexpensive. The investment banking aspects and the necessity of adhering to securities laws causes the fees and expenses associated with CTL to be somewhat higher than those associated with conventional lending.

Click Our Logo to Apply for A Credit Tenant Lease (CTL) Loan

One way for borrowers to lower the overall cost of securing a CTL loan is to utilize CTL portfolio lenders. These unique lenders underwrite and fund CTL loans with the intention of holding them in their own portfolios for their own benefit for the entire life of the loan.

Lower Rates

Portfolio lenders tend to price CTL loans like bonds rather than like mortgages. Sponsors will find that rates are very reasonable for long term, fixed rate debt. The rates will be set based upon the going rate of an (interpolated) US Treasury Bond plus a very small premium.

Lower Legal Fees

The fixed income funds that have a sophistication level high enough to issue, fund and hold CTL loans tend to be very large, often with assets in the tens of billions. More often than not these funds employ “in-house” counsel that can and do save borrowers thousands in legal fees.

• Fewer Middle Men

Traditional CTL finance uses brokers, bankers, bond traders, third party rating services and independent trustees to get deals done. A portfolio lender cuts way down on the middle men and, because they will not be offering bonds in the market, do not require independently verified credit ratings or National Association of Insurance Commissioners (NAIC) ratings. Less people to compensate can mean big savings to borrowers.

Time is Money

By definition, portfolio lenders don’t need to rely on third party service providers and can move a loan through the process very quickly and efficiently. Portfolio CTL lenders can fund deals 15-20% faster than private placement lenders can, closing loans in as-little-as 45 days from start-to-finish. In NNN real estate investing time really is money the sooner a buyer can get into a deal the more rent they will collect.

Private placement bond CTL financing is an excellent method of financing single tenant, net lease investments and our firm will continue to offer it. However, when a deal qualifies (portfolio lenders have strict qualification criteria and a slightly higher debt-service-coverage-ratio [DSCR] ) sponsors and investors will be well served by applying to a portfolio lender.

The author of this post, Glenn Fydenkevez, is President of MasterPlan Capital LLC. He has over 25 years in the finance industry and has been an officer at one of the world’s largest investment banks. Feel free to contact him with any questions you may have about CTL finance or other aspects of commercial real estate finance.

Credit Tenant Lease Loans – Large ($15b) Fixed Income Fund Seeks CTL Deals – MasterPlan Capital Expands CTL Offerings

May 2, 2011

We are very pleased to announce that, through a strategic partnership, with a large fixed income fund, MasterPlan Capital can now offer “portfolio” CTL lending against stand alone real estate that is triple net (NNN) leased to a single, investment grade tenant.

By originating loans that are to-be underwritten, funded and held by a single, specific fund, we can offer significantly lower effective rates and greatly lower the costs associated with CTL finance.


This portfolio financing represents a welcomed addition to, not a replacement of, our private placement bond CTL platform that funds loans by underwriting and selling bonds to various investors.

The CTL Portfolio Platform has fairly strict criteria and underwriting standards but, for deals that qualify, the financial benefits can be substantial.

With portfolio lending there is no need to create and sell bonds. This lowers the overall cost by eliminating investment banking functions and the commissions paid to bond traders. Further, the Fund has “in-house” counsel which can lower legal fees by many thousands of dollars.

Collateral:
• Retail, Office, Industrial, Warehouse, Distribution Centers
• Stand Alone (separate tax parcel) real estate
• Single Tenant
• NNN, NN or Bondable
• Investment Grade Tenant
• External or NAIC Ratings NOT necessary.
• Located in Population Centers
Minimum:
• $5,000,000.00+ (prefer $15,000,000.00+)
Parameters:
• Debt-service-coverage ratio (DSCR): 1.05X
• Loan-to-value (LTV): Not Restricted (Subject to DSCR)
• Can Provide 100% Financing (subject to DSCR)
Terms:
• Coterminous (through 30 years)
• Self Amortizing
• Fixed Rate
• Non-recourse
Rates:
• Priced Like a Bond rather than a Mortgage
• Based on Interpolated US Treasury + a Very Small Spread.
• Extremely Competitive Resulting in Largest Possible Loan Balances

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For More Information Click Here: Contact Us About Credit Tenant Lease CTL Lending , or for fast, personal service call 1-800-727-5140 x# 101. Leave a meaasge that includes the best way to reach you and the best time to be in touch.