An office building property is one that has multiple tenants where the primary purpose is to provide a workplace and working environment primarily for administrative and managerial workers. An office building can accommodate as little as one tenant or multiple tenants depending upon the size and building layout. The most common example of an office building would be a property with multiple floors and multiple tenants.
The number and type of tenants in the property can influence how these properties are underwritten. A property with multiple tenants with a long history of occupancy and sufficient remaining lease terms are generally considered a more favorable property than one with a single tenant. An exception to this however would be a single tenant property with a credit rated tenant. A credit rated tenant is generally a publicly traded company that has sufficient credit ratings on their publicly traded debt.
Structure:
Office building commercial mortgage loans are generally written with 5, 7, 10, 25 and 30 year terms with or without balloons. In general for a purchase a borrower will be expected to put down a minimum of 20% plus closing costs. We do offer office building commercial loans with as little as 10% down dependent upon the borrower occupying sufficient space in the building as a commercial tenant.
Paperwork:For this type of loan expect to provide full documentation on the property to include the income and expense statements or property tax returns and property rent roll. If the loan is a refinance you would be expected to provide any available property third party work such as appraisals, environmental reports, title work, or copies of notes.
This type of commercial mortgage loan can be taken in the name of the individual or the non person entity such as a corporation however the borrower or individuals that have ownership in the holding company would also be expected to personal guarantee the loan. As such anyone that is personally guaranteeing the commercial mortgage loan would also be expected to provide personal tax returns, personal financial statements, and have eligible credit. If the loan size and property qualify it may be possible to do the commercial mortgage loan non recourse with simply means that the borrowers do not have to personally guarantee the loan.
