Posts Tagged ‘Commercial Mortgage Backed Securities’

MasterPlan Capital to Grow Credit Tenant Lease (CTL)Division, sell Hotels, Halt some types of Lending

January 14, 2013

January 2, 2013, BostonMassachusetts, For Immediate Release

Commercial real estate investment banking firm MasterPlan Capital will be concentrating its origination efforts on credit tenant lease financing in the new year and beyond. In it’s annual report to partners, investors, and clients the firm announced that it will be placing more emphasis on growing the companies CTL loan volume and will discontinue lending against some other types of commercial real estate.

MasterPlan has decided to stop originating loans against automotive and gas station facilities, including car washes, and will discontinue rehab loans or loans against underperforming assets (turn-around projects). Further, the company will, over time, dissolve MasterPlan Hospitality Income, a private equity venture that sought to invest in mid-sized hotels along the Eastern Seaboard and on the West Coast of Florida, by liquidating substantially all of the fund’s assets. In 2010 MasterPlan stopped making construction and land loans (accept for single tenant real estate net leased to an investment grade tenant) and they will continue their prohibition on development lending.

 The report said, in-part: “CTL financing is a very efficient use of out time and resources. Once we determine that a deal qualifies for CTL we can proceed with an extremely high degree of confidence in closing. In short; if a stand-alone property has a single, investment grade tenant and a long term net lease, we can absolutely turn that lease into cash for the owner in forty five to sixty days”.

Click our Logo to apply for a CTL or other commercial Mortgage

Click our Logo to apply for a CTL or other commercial Mortgage

 CTL lending is a specialized financing method designed to fund the purchase, refinance and development of single tenant real estate that is net leased (NN, NNN or Bondable) to investment grade tenants. Walgreens, CVS, Home Depot and the US Government are popular tenants who qualify for CTL loans.

 The report continued: “CTL lending is a very unique form of financing that entails aspects of both standard commercial mortgage lending and sophisticated investment banking. Because of our extensive knowledge of both industries we (MasterPlan Capital) are in a very favorable position when it comes to advising clients, arranging financing and shepherding deals through to closing”.  

 CTL bankers issue and sell private placement bonds that are backed by net lease income. Proceeds from the bond sales are used to fund a commercial mortgage loan to the owner of the property. CTL loans are administered by third party trustees throughout the life of the loan.

 In the conclusion of the statement MasterPlan noted: “CTL finance has been a bright spot for our industry and for MasterPlan Capital during a very difficult lending environment. The relationships we’ve developed and the experience we’ve acquired will allow us to become a national leader in credit tenant lease lending over the next few years. We are excited about our prospects going forward and expect that our focus on CTL will continue to benefit our clients and our firm”.

 MasterPlan Capital LLC is a dynamic, privately owned commercial mortgage lender and commercial real estate investment banking firm active nationwide in commercial real estate investment and finance. Commercial real estate investors and property owners can apply for a CTL or other commercial mortgage online or call 800-727-5140  with questions.

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To Qualify for Credit Tenant Lease (CTL) Finance Tenant Must Have “Investment Grade” Credit Rating

February 17, 2012

Credit tenant lease finance is an excellent source of capital for the purchase, refinance or development of net leased property. This unique method of lending against single tenant real estate can provide long term, high leverage, fixed rate debt to NNN investors quickly and efficiently, but it is important to realized that not all tenants qualify.

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

To secure CTL loans the tenant must have an investment grade credit rating from a major rating agency. Bankers have no leeway in this matter.

In order to be considered a “credit tenant” the entity must have a BBB- or better rating from Standard & Poors or a Ba1 rating (or better) from Moody’s.

Sponsors and investors with questions about CTL finance or NNN real estate investing are encouraged to call MasterPlan Capital at 1-800-727-5140 x 101 to speak with an expert or to begin the CTL loan process.

Capital Available for Walgreens Mortgage Loans – Commercial Real Estate Investment Banker Earmarks $80mm for Walgreens Credit Tenant Lease (CTL) Loans.

February 1, 2012

CRE NEWS:
Jan 31, 2012

Commercial mortgage lender and real estate investment banking firm, MasterPlan Capital, has determined its 2012 capacity for credit tenant lease lending against Walgreens stores to be $80,000,000.00. 

Walgreens is a popular tenant among single tenant, triple net (NNN) investors and MasterPlan’s ’12 business plan allocates $80mm in capital for CTL loans for the pharmacy chain.

The firm will consider Walgreens CTL loans with a balance of $3mm or more but prefers portfolios of 3 or more stores with a loan balance of $15mm or better. MasterPlan also noted that it will originate loans against ground leases and construction projects if the numbers work but prefers purchase and refinance loans for fee simple, existing locations. The company’s business plan also revealed that it will shun Walgreens leases with less than 10 years left on them and will instead look to make loans against leases with at least 15 years left on the first leg. 

Walgreens is just one credit mentioned in the firm’s 2012 strategy and their plan noted that it can make loans against almost any tenant that has a long, net (NNN, NN or bondable) lease and an investment grade credit rating (BBB- or better by S&P, Ba1 or better by Moody’s).

Basic Credit Tenant Lease Lending Criteria – What it takes to qualify for a CTL loan

August 19, 2011

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 Baa3 (or better) by Moody’s, or Equivalent.
Term:  Co-Terminus with Lease
Amortization: Full, Self Amortizing

Click on our logo to apply for a CTL loan or other commercial real estate financing

Click on our logo to apply for a CTL loan or other commercial real estate financing

Rate: Fixed, Interpolated US Treasury + Small Margin
Recourse: Non-Recourse
LTV: No Restrictions on LTV (To 100% LTV subject to DSCR)
DSCR: 1x-1.05x
Minimum: $3,000,000.00
Maximum: Virtually No Maximum

—Click Here to Apply for a CTL Loan—Click Here to See How MasterPlan does Business—Click Here to Learn More About the CTL Loan Process

Financing is Available for Walgreens Portfolios – Capital for Credit Tenant Lease (CTL) Loans against Multiple Walgreens Locations – Special Pricing (Low Rates) for 3+ Stores, $15MM+ Loans

August 15, 2011

Commercial real estate investment banking firm, MasterPlan Capital, has a significant, but limited amount of capital available to fund credit tenant lease (CTL) loans for the purchase, refinance and construction of multiple Walgreens stores.

Sponsors with 3 or more Walgreens locations ($15MM+) who are willing to cross collateralize the properties will find current interest rates extremely attractive.

The firm notes that Walgreens financing remains tentative, due to over saturation of Walgreens debt in investors portfolios, but is available as-of right now.

Property owners, builders and investors can apply for a CTL loan on line or can call 800-727-5140 xtn # 1 for a phone consultation.

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.

Read More Articles on Commercial Real Estate Finance –  Click Here – And Here

 

The Benefits of Credit Tenant Lease (CTL) Loans for Single Tenant, NNN Leased Real Estate

July 13, 2011
Credit tenant lease (CTL) lending has several distinct advantages over traditional commercial mortgage lending. No one type of financing is right for every situation but CTL should be considered whenever investors are buying, refinancing or building single tenant real estate that is , net leased (triple net (NNN), double net (NN) or bondable) to investment grade tenants.

Non Recourse – The sponsor / borrower is not underwritten and will not be on the hook if a loans defaults. If the tenant and the lease pass muster, the loan will close.

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

Speed – CTL loans have been known to close in 45 days from start to finish (60 days is typical). Conventional commercial mortgages can take 90-180 days to fund and close.

High Leverage – CTL bankers place no restrictions on loan-to-value (LTV) or loan-to-cost (LTC). If the debt service is covered (1-1.05x debt-service-coverage-ratio [DSCR]) by the rent CTL lenders will lend up to 100% LTV or LTC. CTL, without question, offers the highest loan balances in the commercial mortgage industry.

Fixed Rate – Rates on CTL loans are generally fixed for the entire life of the deal.

Self Amortizing – CTL mortgages are fully amortized with a term that is co-terminus with the lease. Borrowers won’t have to worry about coming up with large balloon payments or refinancing every 3, 5, 7 or 10 years.

Straight Forward Process – If the tenant is investment grade (BBB+ or better by S&P or Ba1 or better by Moody’s, or the equivalent), the property is stand-alone, single tenant and the deal carries a long term, net lease, CTL offers a very, very high degree of financing certainty.

Liquidity – There is no shortage of liquidity in the CTL sector of the commercial mortgage lending industry. Billions of dollars are available right now to finance single tenant, net leased, credit tenant real estate and bankers are actually eager to lend.

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

 

Accredited Investor Qualifications – Who Can Buy Commercial Real Estate Private Placements?

June 21, 2011

As commercial real estate investment bankers we may sometimes have occasion to raise money in various private placements or other equity arrangements.

It is our policy to only offer such opportunities to “accredited investors” even in cases where some non-accredited investors could legally participate.

This begs the question: Who qualifies as an accredited investor?

We follow the Federal securities law definition and consider an accredited investor to be:

1. a bank, insurance company, registered investment company, business development company, or small business investment company;
2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
4. a director, executive officer, or general partner of the company selling the securities;
5. a business in which all the equity owners are accredited investors;
6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;
7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

More Liquidity for Multi-Family; Freddie Mac Adds Adjustable Rate Mortgages (ARM)

June 7, 2011

Freddie Mac recently announced that adjustable rate mortgage (ARM) loans are now eligible for securitization into Freddie Mac Multi Family Mortgage Backed Securities (K Certificates).

ARMs will now be purchased by Freddie through its CME multi family mortgage loan execution path. The loans will be bought from approved lenders in Freddie’s network, pooled with other eligible loans, securitized by Wall Street investment bankers and sold to the public.

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MasterPlan Capital LLC; Commercial and Multi-Family Mortgage Loans, Equity Financing & Asset Management.  View our commercial real estate finance services, see how we do business or apply for a commercial mortgage loan. Our simple (1 page) commercial mortgage request form takes only a moment to complete and you will receive prompt, professional service.                                        

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Liquidity is, of-course, welcome as we continue to work out of our credit malaise, but as we have said before, it is somewhat disconcerting that such a large percentage of all multi family lending must come from the Government.

Click Here to Learn More about Freddie Mac Multi Family ARM Loans.