Balance Sheet Lending
Permanent balance sheet loans include fixed interest rates, providing predictability in monthly payments throughout the loan term, typically ranging from five to thirty years, which allows borrowers to spread out repayment over a manageable timeframe. This stability is advantageous for budgeting and financial planning. These loans often offer flexible repayment terms tailored to the cash flow needs of the property, such as amortization schedules that can be customized to match the property's income generation.
Lenders assess permanent balance sheet loans based on the property's income potential, the borrower's financial strength, and the overall market conditions. Collateral, such as the property's physical and financial condition, plays a significant role in securing the loan. These loans are ideal for investors looking to stabilize cash flow through long-term property investments, as well as developers seeking capital for new projects in the commercial real estate sector.
Our team's expertise in navigating the complexities of these financing options ensures that investors and developers receive tailored advice that aligns with their financial goals and investment strategies. By leveraging our in-depth market knowledge and strong relationships with financial institutions, Centum Capital helps clients optimize their loan terms and structures, ultimately enhancing the success and stability of their real estate investments.
Life Company (LifeCo)
Life company loans are a robust financing option for commercial real estate across all asset classes, including multifamily, office, industrial, retail, and more. LifeCo loans typically offer conservative leverage, reflecting the cautious and prudent approach of life insurance companies towards risk. As such, the LTV for these loans usually ranges from 50% to 70% with a heavy emphasis on asset quality (Class A), geographical location, and strong, stable income streams. The emphasis on asset quality means that life company loans are typically associated with properties that have excellent credit tenants, high occupancy rates, and robust cash flow.
Regional and Domestic Banks
Bank loans are known for their adaptability, often featuring both fixed and variable interest rate options, and terms that can range from short-term (one to five years) to longer-term (up to ten years). One of the primary advantages of regional and domestic bank loans is their ability to offer higher leverage compared to life company loans, providing 75% to 80% LTV, allowing borrowers to finance a larger portion of their property's value. Additionally, banks are often more willing to finance a wider variety of property types and conditions, making them a flexible choice for diverse real estate investment strategies.
Local Credit Unions
Unlike traditional banks, credit unions are member-owned, not-for-profit institutions that often provide more personalized service and competitive rates. Credit union loans are known for their flexible terms, which can include both fixed and variable interest rate options, and can range from short-term (one to five years) to longer-term (up to fifteen years).
One of the significant benefits of credit union loans is their willingness to work closely with borrowers to tailor financing solutions to meet specific needs. Credit unions typically size their loans based on a comprehensive evaluation of the property's income potential, the borrower's creditworthiness, and the overall financial strength of the project with leverage ranging from 65% to 80% LTV. This approach allows credit unions to support a wide variety of commercial real estate projects, from small local developments to larger, more complex investments.