Programmes
Commercial underwriting is not one process with the property name changed. An eleven-year lease to a distribution tenant and a storage facility that reprices every month are read differently, reserved differently and levered differently. Each programme below states what it is actually underwritten on, and what usually binds it.
Every range on these pages is illustrative. Where a real rule exists — the five-unit line, the SBA occupancy tests, the 7(a) statutory cap — it is stated accurately and marked as a rule rather than a policy.
01 — Five units and up
Acquisition and refinance of stabilised and lightly value-add apartment property, five units and above.
On stabilised multifamily at current spreads, debt service coverage usually binds before loan-to-value does.
02 — Tenants, terms, rollover
Neighbourhood centres, unanchored strips, single-tenant net lease and ground-floor retail beneath apartments.
Debt yield binds most retail deals, because the same NOI supports far less debt at a 10% floor than at 8%.
03 — Clear height, dock, power
Warehouse, distribution, light manufacturing and flex/service-centre property.
On low-leverage industrial with a long lease, loan-to-value is usually the binding constraint.
04 — Term, TI, and honesty
Suburban office, medical office and single-tenant office, underwritten conservatively and openly.
Debt yield binds nearly every office deal at current levels, and it binds by a wide margin.
05 — A loan with a date on it
Twelve to thirty-six months of interest-only debt against a business plan and a defined exit.
Loan-to-cost caps the funding; the exit test caps the sensible size. They are different numbers and the smaller one wins.
06 — Draws, reserve, completion
Vertical construction debt with a draw schedule, a funded interest reserve and a completion guarantee.
Loan-to-cost and loan-to-stabilised-value are both tested. Whichever produces the smaller number is the loan.
07 — Owner-occupied, low injection
Owner-occupied real estate for operating businesses, with a smaller equity injection than conventional debt.
Business cash flow binds these deals. The property matters, but a business that cannot cover the payment does not get the loan because the building appraised well.
08 — Storage, hospitality, student
Self-storage, limited-service hospitality and purpose-built student housing.
Debt yield, and by a distance. These assets carry the highest floors on the sheet.
Four colour schemes. Each pair was measured on the surface it is actually painted on, in both themes.
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