Office Building Loans & Financing Options

Eligible Property Types
Class ‘A’, ‘B’, and ‘C’ suburban and urban office buildings, professional and medical office buildings. Single tenant office properties with long term leases located in strong markets are also eligible for this program.

Loan Parameters

Loan Term
Loan maturities are typically 5, 7, or 10 years. Other loan terms will be considered on a case-by-case basis, including 15 and 20 year maturities.

Loan Amortization
Up to a 30-year amortization. Interest only periods available on a case-by-case basis.

Debt Service Coverage Ratio (DSCR)
Minimum DSCR 1.25:1. Asset qualities such as age, physical condition, tenant mix and competitive market position are significant considerations in determining the applicable DSCR.

Loan-to-Value Ratio
The lesser of up to 80% of MAI appraised value conforming to FIRREA and USPAP guidelines and 95% of loan to acquisition cost (if applicable).

Loan Escrows
The Borrower will typically contribute monthly to an escrow account for real estate taxes and property insurance. The Borrower will usually also establish a monthly rollover reserve escrow for costs of tenant improvements and leasing commissions and a monthly capital replacement escrow reserve equal to the greater of $.20/square foot per year or an amount to be determined by Lender on the basis of an engineering report and Lender’s site inspection. These reserves may be waived or capped in certain instances.

Reserves at Closing
The Borrower will establish a remediation/repair reserve at closing equal to 125% of required deferred maintenance repairs as indicated in the engineering report and Lender’s site inspection and on a deal specific basis, reserves for tenant improvements.

Property Types
Class ‘B’ or better suburban and urban office buildings, professional and medical office buildings. Single tenant office properties will be considered on a case-by-case basis.

Essential Office Building Financing Highlights:

· Keep your payments down with long term office building financing.

· Very competitive interest rates.

· Financing can include a second position seller take-back.

· Extremely competitive interest rate for office building financing.

· Terms: From pure variable to 20 and 30 year fixed.

· Many adjustable rate programs are available.

· Amortization up to 30 years.

· Up to 20% second lien position seller take back allowed in most cases.

· Most loans are acceptable with lender approval.

· Prepayment penalty varies with individual loan.

· Small Loan Programs for office buildings with buyer or owner sub-par credit rating. Loan amount up to $800,000. Low credit scores are often eligible.

Here is a check list for Office Building Loan:

1. Current Rent Roll including:
– Square Footage of units
– Lease abstract details such as: Escalations, commencement & expirations, add-ons, description of tenant, Description of any added rent that the tenant is responsible for (In addition three years of historical data would be ideal)

2. Complete Income/Expense Statements on the property including:
– Annual property taxes
– Insurance
– Water/Sewer
– Fuel
– Electricity
– Maintenance/Repairs
– Management
– Leasing commissions, tenant improvements

3. Complete detailed physical description of the property, along with the site map, floor plan, and property survey.

4. If acquisition, provide the copy of fully executed contract of sale.(indicates the date).

5. If refi, price originally paid for property, date of purchase and summery of current financing.

6. Floor plan and photos of the property.

7. Outlined recap of current financing (refinance only) including:
– Current lender
– Current principal balance
– Current interest rate
– Current monthly payment
– Due date
– Prepayment penalty information

8. Personal info and resumes info on the management and the owner.

9. Current personal financial statements (last three years)

10. Current Business financial statements (last three years).

11. Personal Tax Returns (last two years).

12. Business Tax Return (last two years).

13. Authorization to run credit report.