Permanent Senior Debt
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We understand how long-term capital with the correct leverage can make a meaningful impact on your property’s levered returns. And we know — by maximizing your amortizations, you can drive down interest costs and boost your cash flow. Many permanent financing lenders cover industrial assets, but critical differences can often lie in the details.
Life insurance companies typically offer the most aggressive financing options, but their selection criteria is the strictest: They tend to focus on Class A industrial assets in the country’s largest markets. They generally offer lower leverage and shorter amortizations — although the longest fixed-rate loans are primarily fully amortizing.
CMBS loans offer the highest leverage, up to 75%, and have the longest amortizations of up to 30 years. These loans start at only $2 million, though they tend to have higher spreads — and, thus, higher interest rates — due to liquidity concerns in secondary and tertiary markets.
A traditional bank lender can offer a good blend of life company and CMBS loans. For financing of $25 million or higher, expect lenders to offer more aggressive terms — and pension funds and larger institutional lenders may also get involved.