Commercial Real Estate
Conventional
Conventional commercial loans are the go-to for those who need flexibility and fast action. Whether you’re a seasoned pro or just stepping into the commercial property game, these loans offer the financial muscle to get the deal done. Crux Commercial Partners specializes in cutting through the red tape, helping you secure the funding you need with a no-nonsense approach.
Why Go Conventional?
Conventional commercial loans offer key advantages that make them a smart choice in many situations:
- Finance Distressed Properties: Banks often underwrite these loans based on both the property and your personal guarantee, making them an option for distressed assets.
- Available to Inexperienced Borrowers: If your financials are solid, you can secure a loan even without a ton of experience. Your personal guarantee can carry you through.
- Loan Size Flexibility: Perfect for properties that don’t need a massive loan, making it accessible for a broader range of investments.
- Faster Underwriting: Skip the federal hoops. Conventional loans get underwritten quicker than government-backed options, so you can move at the speed of business.
The Catch
Every loan type has its downsides, and conventional commercial loans are no different:
- Tight Requirements: You’ll need a strong credit score, a solid net worth, and post-closing liquidity to meet personal guarantee demands.
- Personal Liability: If you go full or partial recourse, you’re on the hook if things go south.
- Fixed Interest Periods: Conventional loans often come with shorter fixed interest periods than commercial mortgage-backed securities (CMBS) loans, which might not suit long-term plans.
Eligible Properties
Multifamily, Office, Retail, Warehouse/Industrial, Hospitality, Medical/Healthcare, Self-Storage
Loan Amount Range
Minimum $1M
Interest Rate
Fixed rates vary. Floating rates start at 2.30% over LIBOR
Loan Term
3 to 15 years
Amortization
10 to 30 years
Maximum LTV
80%
Minimum DSCR
1.20x
Minimum Debt Yield
7-8%
Recourse
Can be non-recourse, limited-recourse, or full recourse
Prepayment
Options range from no prepay penalty to step-down or flat-rate penalties
Bridge
Commercial bridge loans are the go-to solution for real estate investors and developers who need fast, flexible financing. When timing is everything, these loans are your best bet for snapping up a property or funding a renovation without the usual delays. Whether you’re flipping houses, developing real estate, or even expanding your business with a new property, a commercial bridge loan from Crux Commercial Partners bridges the gap to your next big move.
Why Commercial Bridge Loans?
These loans aren’t just a stopgap—they’re a strategic move. Here’s why commercial bridge loans are a powerful tool in the real estate game:
- Quick Closings: Underwriting is fast, allowing you to close deals quickly and make your offer stand out.
- Flexible Credit Requirements: Unlike traditional mortgages, commercial bridge loans focus on the property’s value, not just your credit score. Even with bad credit, you might still secure the loan.
- Interest-Only Payments: Pay only the interest while you work on the property, deferring the bulk of the loan until you sell or refinance. Ideal for flippers and developers looking to maximize cash flow.
The Catch
Of course, every loan has its downsides. Here’s what you need to watch out for with commercial bridge loans:
- Short Term: These loans are designed for the short haul, typically no more than 3 years. If you need longer-term financing, you’ll need to refinance into something more traditional.
- Higher Interest Rates: The speed and flexibility of these loans come at a cost—interest rates are typically higher than traditional loans. While the total interest over a short term might be manageable, it’s something to consider.
- Higher Origination Fees: The convenience and speed of a bridge loan often come with higher upfront costs. Be prepared for higher origination fees compared to other loan types.
Eligible Properties
Multifamily, Office, Retail, Hospitality, Student and Senior Housing in strong markets
Loan Amount Range
Minimum $1M
Interest Rate
7% or higher over index
Loan Term
12 to 36 months, with possible extensions
Amortization
Generally interest-only, with some exceptions
Maximum LTV
75% of cost (LTC), capped at 70% of the completed or stabilized value
Recourse
Non-recourse, except for industry-standard “bad act” carve-outs
Prepayment
Generally allowed
Loan Exit
Fannie Mae, Freddie Mac, FHA, or CMBS loan
CMBS
When it comes to financing U.S.-based commercial real estate projects, Commercial Mortgage-Backed Securities (CMBS) loans are a major player. These loans are versatile, widely available, and offer some killer advantages over other commercial property loans. Known in the industry as “conduit loans,” CMBS loans get their name from the way they’re bundled and resold as securities—essentially turning your loan into a bond that gives you access to capital from bond investors.
Why CMBS Loans?
CMBS loans pack a punch when it comes to commercial financing. Here’s why they stand out:
- Fixed Interest Rates: Enjoy stability with fixed rates that are often lower than conventional mortgages. The rates are tied to the U.S. Treasury rate, with a margin added on top, giving you a predictable payment schedule.
- Non-Recourse & Assumable: Protect yourself with non-recourse loans that shield you from personal liability, while the assumable nature makes it easier to sell the property without renegotiating loan terms.
- Flexible Loan Sizes: CMBS loans offer a wide range of loan amounts and don’t have the restrictive terms that come with agency-backed mortgages. Whether your project is big or small, CMBS can fit the bill.
The Drawbacks
While CMBS loans have a lot going for them, they’re not without their challenges. Here’s what you need to watch out for:
- Tax Law Restrictions: Even though conduit loans aren’t tied to the same restrictions as agency loans, they still have to comply with tax laws that allow them to be resold as securities. This can limit your flexibility in negotiating loan terms.
- Prepayment Penalties: Prepayment penalties on CMBS loans are no joke. Unlike conventional mortgages, where penalties are usually a percentage of lost interest, CMBS loans are often tied to the Treasury yield. If Treasury rates drop, you could be on the hook for substantial prepayment costs.
Eligible Properties
Multifamily, Office, Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage
Loan Amount Range
Starts at $2M
Interest Rate
Fixed rate for the duration of the term, priced over the corresponding swap rate
Loan Term
5, 7, and 10-year fixed terms
Amortization
25-30 year amortization with up to 10 years of interest-only available in select cases
Maximum LTV
75%
Minimum DSCR
1.20-1.25x
Minimum Debt Yield
7-8%
Recourse
Non-recourse, with standard “bad boy” carve-outs
Prepayment
Typical 2 to 3 year lockout, followed by defeasance or yield maintenance
Reserves
Taxes, Insurance, Replacement Reserves, Tenant Improvements, and Leasing Commissions typically required
Loan Amount
$2.2M
Details
- Multifamily Acquisition
- 6.19% Interest Rate
- 1031 Exchange
- 10 Year Term
- 30 Year Amortization
- Recource
