Posts Tagged ‘single tenant’

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.

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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

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.

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.

Why Sell a Single Tenant, NNN Asset When you can get a High Leverage Credit Tenant lease Refinance Loan Instead?

May 6, 2011

An interesting and informative article asks why sell when you can CTL?
When compared to attempting to sell a NNN leased, single tenant building, CTL can be highly favorable and is often the better choice. CTL offers the largest loan balances in the commercial mortgage industry (to 100% LTV), and unlike sales proceeds, there is no tax bill due.
Click Here To Read the article

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

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.

Credit Tenant Lease (CTL) Financing for Single Tenant, Triple Net (NNN) Real Estate Investing – The Perfect Capital Solution for a Unique Real Estate Investment

March 30, 2011

Click Our Logo to Apply for A CTL Loan

By Glenn Fydenkevez – President, MasterPlan Capital LLC

There are two principle reasons to invest in commercial real estate; current income today, and capital appreciation over time. For real estate investors primarily concerned with income, triple net (NNN) real estate investing has proven to be a very attractive option.

Single Tenant NNN Investing

In the world of commercial real estate the initials “NNN” refer to the fact that a parcel of real estate is leased to a tenant on a “triple net” basis. In-short NNN owners have virtually no landlord responsibilities. They don’t have to plow the driveway when it snows, repair the roof if it leaks or fixed clogged toilets when visitors use too much TP. A NNN property owner’s only responsibility is to collect the rent and pay the mortgage; everything else is falls to the tenant.

Savvy real estate investors and Wall Street Investment bankers understand that owning NNN leased real estate is more closely related to fixed income investing than it is to traditional real estate investing. With this knowledge it’s a short hop to credit tenant lease (CTL) finance.  Through the magic of investment banking, specialized CTL bankers turn NNN leases into bonds and turn those bonds into cash.

Credit Tenant Lease Finance (CTL)

The concept behind CTL is easy to understand even while the actual CTL process is quite intricate. First, mortgage specialists originate a commercial mortgage loan. Next, investment bankers create and issue private placement bonds that are directly secured by the NNN lease on the target property. Finally brokers and bond traders sell the bonds to institutional fixed income investors like insurance companies, commercial banks, trusts, and pension funds. The proceeds from the bond sale are used to fund the mortgage and go to the borrower at closing. The entire loan is administered by an independent trustee throughout the life of the deal.

The investors who buy CTL bonds depend on the income the bonds produce, and the bonds, in turn, depend on the income guaranteed by the NNN lease that stands behind it. It follows that the financial strength of the tenant is paramount. To qualify for CTL financing the tenant must be considered “investment grade”. Usually this means that they need a high credit rating from one of the major rating agencies. CTL finance companies generally require tenants to have a BBB- (or higher) rating from Standard & Poors or a Ba1 (or better) from Moody’s before they will underwrite a CTL loan.

CTL finance and NNN investing work together like they were made for each other because in-fact they were. CTL is not the only way to finance single tenant, NNN real estate but it is definitely the most synergetic.

High Leverage

CTL bankers make no restrictions on loan-to-value (LTV) or loan-to-cost (LTC) when deciding how much money they will lend against a particular lease. 100% financing and even cash out financing is realistically possible when buying, building or refinancing with CTL. Bankers only require that the rent collected covers the mortgage payment. Debt-service-coverage (DSCR) ratios are exceedingly low, ranging from 1.05x right down to 1x. There is no question that CTL offers the highest loan balances in the commercial mortgage industry. (high LTV / LTC, and cash-out refi are almost unheard of in the realm of institutional financing in today’s credit environment).

Fixed Rate, Long Term, Fully Amortized

The majority of CTL loans are fixed rate, self amortizing loans with a term “coterminous” with the term of the lease (The loan is paid off when the lease expires). Long term, fixed rate mortgages, while commonplace in residential finance, are rare indeed in the commercial property sector. Long, stable loans allow sponsors to budget for the long haul. Mortgage payments don’t change and there are no looming balloon payments to plan for. Plus investors avoid the expense and hassle of refinancing every 3, 5,7 or 10 years.

Non-Recourse

The primary security that backs a CTL loan is the monthly income that the NNN lease produces. CTL bankers will not require borrowers to personally signature guarantee each loan, nor will they aggressively pursue the borrower if the tenant defaults. CTL lending is based on the strength of the tenant and the structure of the lease, not the wherewithal of the landlord.  

Assumable

Virtually all CTL loans are assumable by a subsequent buyer for a small (usually 1%) fee. So, not only will an original owner never be forced to refinance but, if they decide to sell, they can offer their buyer the benefits of a CTL loan for less then the cost of a new mortgage.

Streamlined Process

We’ve said that CTL lending is highly specialized and intricate, and it is, but it is also standardized. If a deal meets CTL criteria, the funding can happen very quickly and very efficiently. CTL loans have been known to close, from-start-to-finish, in as little as 45 days and it is rare for a loan to take more than 60 days to underwrite, fund and close. NNN investors can go from decision to closing table in about a third of the time it takes to close a bank loan.

Income and Tax Planning

Income is the main reason individuals and institutions buy single tenant, NNN, credit tenant real estate, but it is by no means the sole reason. Sophisticated real estate professionals acquire NNN assets for other reasons as-well. Savvy investors use NNN to take advantage of the unique tax benefits that real estate can provide. By adjusting the amount of leverage they use they can manipulate the amount of cash-flow a building produces and make the income and deprecation tax laws work for rather than against them. NNN is also often used as a vehicle for 1031 exchanges when investor’s desire continued income without having to manage a property or pay large capital gains taxes on a recent sale.

Construction and Development

Builders and developers like NNN real estate as-well, because they know they can stick to construction of a building without ever worrying about managing it. And with CTL financing readily available, they have the confidence that comes with knowing they can cash-out whenever they want.

Cash-out Refinance

One of the most attractive aspects of CTL finance is that it allows credit tenant property owners to execute cash-out refinance loans. As we mentioned above there are no LTV restrictions on CTL loans. If an investor bought right and has equity in a NNN asset, they can pull out up-to 100% of its value. Refinancing with a self amortizing CTL loan avoids all the fuss, bother, expense and time associated with selling, yet still allows owners to realize full value.

A Great Fit

For the sophisticated, income orientated real estate investor there is no better asset class than single tenant, investment grade, NNN real property. And for NNN investors there is no method of financing better suited to NNN than CTL.  

About the Author: Glenn Fydenkevez is President of MasterPlan Capital LLC. He has over 20 years Wall Street experience and has been an officer at one of the worlds largest investment banks. About MasterPlan Capital LLC: MasterPlan Capital is a privately held commercial mortgage lender and real estate investment banking firm offering private and institutionally funded commercial mortgage loans, credit tenant lease (CTL) financing and other services to property owners and developers in the lower 48 states.

To get answers to your questions about CTL lending or other aspects of commercial real estate finance, call MasterPlan Capital at:                                                    1-800-727-5140 xtn 101