Investing in Office Buildings

It should come as no surprise that the Covid 19 pandemic has taken a toll on Commercial Real Estate, specifically office buildings and hotels. However, there is still plenty of capital to be had for the right properties, at the right price, with the right management plan and team in place.

Like most Commercial Real Estate (CRE), Office buildings are rated based on their property characteristics, location and construction. They are graded as Class A, B or C. Investing in various classes can create a greater degree of portfolio stability.

Triple Net Leases (NNN) Common: Many larger office tenants expect to pay for all operating costs including property taxes, insurance and maintenance. At the very least, it is a common practice to pass through Common Area Maintenance (CAM) costs in buildings with multiple tenants.

Long Term Leases: Once a stable tenant is found, long-term leases are common. Though subject to the possibility of a small loss in market rent, the dependable income can stabilize an investment portfolio.

Renovation Cost Pass-Thru: Often tenants will require that the landlord renovate the space to meet their particular specifications. These renovation costs are commonly prorated over the term of the lease and added to the base market rent.

OFFICE BUILDING FINANCING PROGRAM HIGHLIGHTS

Please note that these are just a few of the options we have available. We will work with you to find the perfect fit for your project.

BRIDGE TO FREDDIE MAC

  • Uses: Purchase, Recapitalization, Refinancing (Including Cash-Out), Upgrades and/or Seasoning, Expedited Closings
  • Good for Non-Stabilized Properties, Rehab/Renovations
  • Loan Size: $1MM – $7.5MM
  • Leverage up to 85% LTC/80% LTV
  • Terms: Typically < 2 yrs with 6 month to 1 yrs extensions available
  • Interest Only
  • Non-recourse

FIXED RATE PROGRAM

  • Uses: Acquisition, Refinance, Cash Out
  • Property Types: Multifamily, office, retail, industrial, self-storage and hospitality
  • Loan Size: $1MM – $25MM with portfolios up to $100MM
  • Stabilized properties
  • Terms: 2-10 yrs (can consider longer terms on case-by-case basis) with up to 30 yr amortization
  • Flexible payment schedules
  • Non-Recourse
  • As low as 1.20x DSCR
  • No minimum FICO stated
  • Can close in less than 30 days when requested

FIXED RATE FREDDIE MAC SBL PROGRAM

  • Loan size: $1MM to $7.5MM
  • Terms: Fixed 5, 7, 10 yr, Hybrid 20 yr ARM with initial 5, 7, 10 yr fixed
  • Prepayment: Declining schedules available
  • 120x DSCR Top, 1.25x Standard, 1.30 Small/Very Small
  • Stabilized properties
  • Amortization: Interest only partial term and full-term may be available with 30 year amortization.
  • Minimum 650 Avg FICO, Net Worth equal to loan amount, Liquidity equal to nine months debt service.