Commercial Financier /Instructor

Niche Properties

Credit Tenant Lease (CTL) financing is a $2-3 billion a year component in today’s commercial real estate market. Traditional real estate loans are written against the value of the land, as well as the credit and business record of the borrower. Alternatively, CTL financing emphasizes both the credit quality and lease structure of the tenant to establish a cost of borrowing.

Investment grade tenant loans tend to price and trade like bonds in the capital markets. Deriving pricing for non-investment grade and non-rated tenants requires additional analysis including, among other risks, the value of the real estate asset.

CTL financing generally has several advantages over traditional real estate financing. These benefits include tighter pricing, lower debt service coverage ratios, maximum loan proceeds and greater liquidity. Today, CTL financing is a valuable source of capital and an effective use of the debt capital markets for:

acquisition financing
permanent financing
equity withdrawal
additional working capital
refinancing term maturities
Benefits of CTL financing with us include:

  • Up to 100% LTV funding
  • DSCRs as low as 1.0x
  • Long-term commitments for 15-25+ years
  • Lower transaction costs by combining construction and permanent financing
  • Non-recourse owner financing
  • Quick response and fast turnaround, with no lender fees
  • Interest rates similar to investment grade debt pricing
  • Relationship-oriented approach in which our dedicated team oversees all aspects of the financing, from origination structuring through lease expiration

Ctl financing is works well with NNN properties that have investment grade tenants.