Each of the following categories has unique characteristics and risk factors that impact the loan underwriting process. A tailored approach is crucial to ensure a successful transaction for all parties involved:

 

• Multifamily
  Completing a commercial loan for multifamily properties involves evaluating the income generated from residential units, assessing tenant occupancy rates, and reviewing property operating expenses. Lenders often focus on the property’s Debt Service Coverage Ratio (DSCR) and the borrower’s experience in property management.
   

• Office
  Office property loans require an analysis of tenant leases, vacancy rates, and market demand in the area. Lenders evaluate lease terms, tenant creditworthiness, and potential challenges in maintaining occupancy due to remote work trends or local economic conditions.
   

• Retail
  Retail loans typically involve examining tenant mix, lease agreements, and the property’s location. Lenders assess the impact of e-commerce competition and the financial health of anchor tenants or large retail chains that influence the success of the property.
   

• Mixed-Use
  Mixed-use property financing involves evaluating the blend of residential, retail, and office spaces within the development. Lenders assess the proportion of income from each segment, the diversity of tenants, and the property’s adaptability to meet local market demands.
   

• Co-Ops
  Co-op loans focus on the financial stability of the cooperative corporation, including its operating reserves, maintenance fees, and underlying mortgage. Lenders also assess the co-op’s rules for shareholders and their ability to meet loan obligations collectively.
   

• Hotels
  Hotel financing requires a detailed analysis of the property’s operational performance, including occupancy rates, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR). Lenders also consider the borrower’s experience in hospitality management and the location’s appeal to travelers.
   

• Senior Housing and Healthcare
  Loans for senior housing and healthcare facilities involve assessing specialized factors, such as regulatory compliance, care quality ratings, and operating margins. Lenders evaluate the property’s alignment with demographic trends and the borrower’s experience in the healthcare industry.
   

• Industrial
  Industrial property loans focus on evaluating factors like location, tenant lease terms, and property specifications such as clear heights and dock access. Lenders often prioritize properties with long-term, stable tenants like logistics or manufacturing companies.
   

• Development Site
  Financing for development sites involves assessing the borrower’s plans for construction, including blueprints, zoning approvals, and contractor credentials. Lenders require a detailed pro forma analysis and may release funds in stages as construction milestones are achieved.

 

 

These types of financing solutions address specific stages or needs in the commercial real estate lifecycle, allowing investors and developers to manage risks and optimize financial outcomes:

 

• Refinance
  Refinancing a commercial loan involves replacing an existing loan with a new one to secure better terms, lower interest rates, or adjust the loan structure. It may also be used to extract equity from a property to reinvest in other projects.
   

• Acquisition
  Acquisition financing provides capital to purchase commercial properties. Lenders evaluate the property’s value, potential income, and the borrower’s ability to generate sufficient cash flow to cover debt obligations.
   

• Construction
  Construction loans fund the development of new commercial properties or major renovations. These loans are typically short-term, with funds disbursed in stages as project milestones are met. Lenders assess project feasibility, contractor credentials, and the borrower’s experience.
   

• Recapitalization
  Recapitalization loans allow borrowers to restructure a property’s financial framework by replacing equity with debt or vice versa. This is often used to optimize capital structures, pay off existing liabilities, or fund expansions.
   

• Bridge
  Bridge loans are short-term financing solutions designed to cover immediate funding needs while transitioning to permanent financing. They are often used for acquisitions, renovations, or stabilizing a property to improve its financial performance.
   

• Repositioning
  Repositioning loans finance improvements or changes to a property to increase its value or income potential. This might include renovations, changing tenant mix, or transitioning a property’s use (e.g., converting office space to residential).
   

• Mezzanine
  Mezzanine financing combines elements of debt and equity, offering subordinate loans that fill the gap between senior debt and borrower equity. It’s commonly used to fund acquisitions or expansions and provides lenders with higher returns due to increased risk.
   

• Equity
  Equity financing involves raising capital by selling ownership stakes in the property. This is often used in conjunction with debt financing to reduce leverage or meet loan-to-value (LTV) requirements for larger projects.