Warehouse & Industrial Building Loans
Obtaining a industrial commercial loan, means to acquire a service from lenders who are interested in warehouses, flex-space, manufacturing buildings, etc., whether owner-occupied or investment properties.
Eligible Property Types
Light industrial, warehouse and distribution facilities; “flex” buildings, storage facilities and research and development properties. Single tenant industrial properties with long-term leases will be considered.
Warehouse Loan Parameters
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.
Warehouse 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 depending upon property type, age, physical condition, location and competitive market position. Minimum DSCR requirements are 1.20:1 for light industrial, warehouse and distribution facilities; and 1.25:1 for “flex” buildings and research and development properties.
The lesser of up to 80% of MAI appraised value conforming to FIRREA and USPAP guidelines and up to 95% of loan to acquisition cost (depending on property type). Flex space will be considered at up to 80% of appraised value or acquisition cost (if applicable).
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 capital replacement escrow reserve equal to the greater of US$.15/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 records.
Here is the check list for warehouse and industrial commercial loans:
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
– 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.