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Kansas City Credit Tenant Lease Loans

Credit Tenant Lease Loans

 

MidCap can provide financing for acquisition, refinance or construction of a property tenanted by investment-grade rated tenants. Take advantage of having a strong tenant to leverage into the best credit tenant lease loan available.

Credit tenant lease loans have become one of the most aggressive forms for asset monetization. While traditional real estate loans are written against the value of the real estate, credit tenant lease loans emphasize the credit quality of the tenant and the structure of the lease in order to establish a cost of borrowing. The rental payments are assigned to the lender and the asset is pledged as collateral in the form of a first lien. Credit tenant lease loans have several advantages over traditional real estate financing and therefore are a valuable source of capital and an effective use of the debt capital markets. Some of the benefits of credit tenant lease loans, include:

 

 

Benefits of Credit Tenant Lease Loans

• Credit tenant lease loans are non-recourse

• Interest rates are typically fixed for longer periods of time (equal to lease term)

• Debt service coverage ratios as low as 1.0x

• Credit tenant lease loans have no maximum loan-to-cost (can be over 100% of costs)

• Generally require no financial or operating covenants

• Credit tenant lease loans for new construction can provide a long-term, fixed rate lock prior to construction