Posts Tagged ‘masterplan capital’

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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How to apply for a credit tenant lease (CTL) loan.-What Information is Needed for a Quick Yes or No Answer.

February 3, 2012

The single most important document a banker needs to see in-order to make a loan decision on the purchase, refinance or development of a single tenant, net leased (NNN, NN or bondable) is the lease itself.

The fact is that if the lease passes muster it is very likely a CTL investment banker can originate and close a fixed rate, high leverage (to 100% LTV), fully amortized commercial mortgage loan in under 60 days.

The executed lease will tell the bank several key pieces of information that are critical to a successful CTL loan. This information includes the lease guarantor, the address of the building, the extent of landlord responsibilities (if any), the monthly rent (from which they can accurately calculate the net-operating-income), the square footage of the building, the existence of any required reserves or escrows and a wealth of other valuable information.

Armed with the details that are included in the lease a CTL banker can, very quickly (usually within 48 hours), give a deal sponsor a highly reliable yes or no decision and if, after reading and analyzing the lease, the answer is yes they can count on an extremely high certainty of execution. The lease will also tell the banker the rent commencement date and how much time is left on the lease. This will allow them to check prevailing rates and calculate their maximum loan amount and the term of the mortgage.

The lease tells the bank almost all it needs to know to determine if a deal can be done.

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

If your deal is viable they will quickly issue you a quote, if you accept the quote you can expect your deal to close in 60 days or less.

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).

MasterPlan Capital Sharpens Focus in 2012; CTL Lending, Bridge Loans and Mortgages on Income Producing Commercial Property to be Emphasized

January 19, 2012

January 3, 2012
Greenwich CT

FOR IMMEDIATE RELEASE:

MasterPlan Capital Sharpens Focus in 2012

Commercial real estate investment banking firm, MasterPlan Capital, has disclosed its 2012 business strategy. In a written statement to clients, employees and investors the firm noted that it will concentrate its efforts on credit tenant lease finance, private bridge lending and commercial mortgage lending against income producing commercial real estate. MasterPlan will deemphasize it’s participation in joint ventures and other forms of equity finance and will not consider land or development loans except for triple net leased projects or for existing clients of the firm.

Regarding credit tenant lease (CTL) loans for triple net leased (NNN), single tenant assets the statement read, in part:

“CTL finance has been one of the healthiest sectors of commercial real estate finance and promises to remain to be strong well into the future. Net lease investors have realized that locking in today’s low rates for the long term is a smart business move. CTL offers them a fixed rate, fully amortized, non-recourse commercial mortgage with terms (coterminous with the lease) to 30 years. MasterPlan Capital can provide these income investors with the absolute lowest rates in the industry and can offer them a very high degree of certainty of execution. In-short, no CTL banker is more competitive in pricing or dependable in closing deals.”

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

The firm also commented on private bridge lending:

“As the economy slowly improves more competitors are entering the short-term, bridge loan space. We intend to compete aggressively for the best deals without subjecting our investors to undue risk. That-is-to-say, in certain instances we might lower our lending rates but won’t increase our loan-to-value (LTV) ratios, won’t offer non-recourse bridge loans and won’t do deals for the sake of doing deals.”

The statement noted that the firm intends to continue originating commercial mortgage loans against income producing commercial real estate:

“Income producing commercial real estate mortgage loans such-as loans against multi-family assets, leased up office properties and light industrial buildings will continue to be a bread-and-butter, activity for the firm.”

The firm went on to explain why it is moving away from joint ventures, equity finance and land and development loans:

“Other forms of structured finance such as joint ventures and equity finance offer the potential for high returns to our company but are very taxing on the time and workload of our people and our third party service providers. We have determined that our valuable time is better spent on our core businesses. As-for lending against land and for construction and development, we will continue making these types of loans against unimproved real estate that is net leased to a single investment grade tenant and for existing clients of our firm but otherwise will no longer be accepting applications for land loans.”

About MasterPlan Capital LLC:

MasterPlan Capital is dynamic, privately held commercial real estate investment banking firm offering credit tenant lease (CTL) loans, commercial mortgage loans and asset management services to commercial real estate investors and owners in the lower 48 states. Clients and prospective borrowers can apply for financing at the firms web site (http://www.masterplancapital.com)  or by calling 1-800-727-5140.

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

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

 

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

 

The Truth About 100% LTV Credit Tenant Lease (CTL) Lending

May 26, 2011

As credit tenant lease bankers we often get questions regarding the possibility of 100% financing for single tenant, triple net (NNN) properties.

Is 100% CTL financing possible?

The answer is yes, it’s possible but…

Like most CTL bankers we place no restrictions on loan-to-value (LTV) nor do we restrict loan-to-cost (LTC) on CTL construction loans. So, in theory, it is possible to secure a 100% leveraged CTL loan.

But please consider the following. While we don’t limit loan balances due to LTV, we do have strict debt-service-coverage ratio (DSCR) criteria. Our firm requires at least a 1x DSCR and we may require as-much-as 1.05x depending on the final deal structure. So the rent you collect must cover the mortgage payment. We will lend up to 100% of the value (lease fee valuation) but we won’t write you a loan with monthly mortgage payments bigger than the monthly rent.

Further, CTL loans are generally self amortizing loans with terms coterminous with the term of the lease. So the shorter the lease term, the shorter the amortization schedule and the lower the loan balance.

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

Also, when buying a net lease property investors must keep in mind the fact that the seller has likely already considered the option of refinance before deciding to sell. No one will sell you a NNN or NN building for the same amount they can borrow. In-other-words if you can borrow a million dollars from me to buy a building the current owner can also borrow the same one million in a refi. They won’t go through the hassle and expense of selling unless they can earn a premium.

So, while it is very true that there are no LTV restrictions on CTL loans, new investors should not assume that they can buy quality net leased assets without a fairly significant capital commitment.

Net lease real estate is an excellent form of fixed income investing and CTL is an excellent capital solution for net lease investors but, there are no free lunches in the commercial real estate industry. Those who believe otherwise will inevitability be disappointed. 

The author of this post, Vincent Remealto, is an analyst for MasterPlan Capital LLC. Feel free to contact him with questions about CTL or other aspects of commercial real estate finance.

CEO of BP, Robert Dudley, takes (Another) Beating in Russia – Punked Again, Shareholders to Pay the Price

May 9, 2011

Over at Seeking Alpha we explain the bind Robert Dudley, CEO of BP, has gotten himself into in Russia. Last time he played in that sandbox the other kids bullied him. It won’t turn out any better this time (unfortunately, for shareholders).

Read the Article Here. Click Here to Visit MasterPlan Capital LLC.

Realty Income to buy Diverse Net Lease Portfolio for $544mm

April 1, 2011

The REIT Realty Income Corp (NYSE:O), is under contract to buy a portfolio of 33 single tenant, NNN leased properties for $544,000.000.00

In keeping with the firms core business discipline, much of the lease income being acquired will come from retailers, however several office, distribution and even manufacturing assets are included in the deal.

The portfolio is diversified across seventeen states and comprises 3.8mm sq/ft of leasable space.

Retail tenants include movie theaters leased to AMC, Cinemark and Regal and pharmacies leased to Walgreens. Tenants leasing office space include T-Mobile, Novus International and Solae. FedEx, International Paper and Caterpillar are among the tenants in the portfolio with leased distribution facilities. Manufacturing plants NNN leased to Coca-Cola and MeadWestvaco are also included in the deal.

There is about $291mm in debt currently encumbering the portfolio. Realty Income will pay off the lion’s share (~$223mm) right after the deal closes the remaining (~$68mm) will be dealt with some time in the future when existing yield maintenance per-payment penalties are more manageable.

The transaction is expected to close late in the first half of this year.

For Information on credit tenant lease (CTL) loans or to apply for CTL or other commercial real estate  financing click here or call Glenn Fydnekevez at 800-727-5140 x 101