100% funding for pre leased NNN developments with credit rated tenants
100% funding NNN construction loan10% To 12% Base Rate, Floating. (As of June 2023)
No lender participation.
1-2 Points In - to Lender
0- 1 Point Out - to Lender
You will need at least a 1. 5% spread between the yield on cost and the exit cap rate.
Lenders need to see a clear path to an exit.
Full Guaranties until rent commencement
I will charge 1% (as broker)
“Bad Boys”
Limitations on Development Fees until CO
Typical collateral:
First Deed Of Trust
Assignment of Rents
UCCs, Etc.
100%
Funding program for pre leased NNN Developments with
credit rated tenants overview:
The developer will need to demonstrate the financial capacity, including the ability to cover cost over runs, to get this to commitment. We need project Proforma and 2 years’ PFS of the developer. The money is paid out in draws either monthly or as benchmarks are reached.
|
Lease type |
Pre Leased |
Credit Rated Tenant Y or N |
Experienced Developer |
LTV |
|
NNN |
Y |
Y |
Y |
100.00% |
|
NNN |
Y |
Y |
N |
90% -100% |
|
NNN |
Y |
N |
Y |
80% - 90% |
|
NNN |
Y |
N |
N |
70% - 80% |
100%
funding NNN Construction Loan typical terms
Base Rate – Floating:
No lender participation: A loan participation is a sharing or selling of interests in a loan.
Yield On Cost: (NOI ÷ Total Cost)
Exit Cap Rate: (NOI ÷ Sales Price or Value)
Bad Boys Carve Out: Bad boy carve-outs are provisions in non-recourse loans that protect investors if the borrower has conducted themselves in a way that is not allowed in the loan terms. Traditionally, all "non-recourse" loans carry some level of recourse in the event that the borrower is a “bad boy.”
100% Funding program for pre leased NNN Developments
with credit rated tenants
nnn@michaellewisgroup.com 440-637-5646
NNN Retail / 100% LTC Build To Suit Construction Loans
100%
financing for pre-leased NNN
We provide 100% financing for development projects and
we only work with pre-leased credit development
projects.
100% financing for pre-leased NNN credit development
projects USA
100% financing for development projects and we only work
with pre-leased credit development projects. Must have a
lease in place or a hard LOI from prospective tenant.
Credit rated tenants and NN or NNN preferred. Can
include land acquisition if it is controlled / at least
under contract. Can be a single project or several.
For credit, pre-leased, “household-name” development,
assume the loan will be 100% of cost not to exceed 80%
of ultimate value (stabilized).
Q: Does the 100%
loan program cover the cost of the land and soft
costs? Yes, it covers the total project cost including
land, hard costs, and soft costs. It even includes a
reimbursement of legitimate, third-party predevelopment
expenses.
Q: Does the borrower need to own the land and have soft
costs and horizontal already taken care of / owned? The
borrower just needs to control the land by way of a
purchase contract. We need to get a package when the
land is under contract and the developer at least has an
LOI with the tenant.
Recourse is negotiable.
The borrower will never be relieved from recourse for
construction completion, environmental nor “bad boy”
clauses.
No lender participation.
The lenders want to charge a point going in and same at
exit. (This is negotiable.)
The total cost of the loan including the interest and
the points for a 100% loan may be higher than the
blended rate of a bank loan and equity capital,
depending on what you must pay for equity capital.
Broker origination 1 point.
Usually 12 - 18 month term; can pay off sooner. Term can
be extended at a charge. 6 month before pre payment
penalty ends.
The lenders want to establish a credit facility, not
just do one-off.
Must be presented so the lenders must understand (be
able to predict) the exit cap rate w/in a narrow range
and exit which can be a sale or a perm loan.
Usually, there is a about a two-point spread between
yield on cost (NOI ÷ Total Cost) and exit cap rate (NOI
÷ Sales Price or Value). A 1.5% spread could be enough.
No dollar limit.
Anywhere in the USA
nnn@michaellewisgroup.com
440-637-5646 100
% funding NNN
For Commercial Real Estate Hard Money Loans
call 440-637-5646
or EMAIL: nnn@michaellewisgroup.com