Do you know about - industrial Mortgage Loans - prestige Tenant Lease Financing facilely ready For Government structure
Mortgage Rate Trend! Again, for I know. Ready to share new things that are useful. You and your friends.Looking for some certain news on industrial mortgage lending and industrial real estate investing? ordinarily speaking there is scant tiny to be found, but one particular sector of the business is victorious and represents a gargantuan opportunity for real estate investors and developers; government buildings. For good or for ill government is growing and growing fast.
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The current supervision in Washington appears particularly amenable to the expansion of government. The economic downturn that has devastated secret business has proven to be a boon for the public sector. Over the next decade government agencies such-as The public security Administration, The branch of Homeland Security, and The branch Immigration and Naturalization will all be addition rapidly and with that expansion will come an predicted need for office space and menagerial facilities. The Justice branch is in dire need of up-to-date, modern court houses and The Us Postal assistance has made a multi-billion dollar commitment to new, high-tech sell postal outlets as-well-as brand new regional distribution facilities. There is a boom going on in real estate, it's the government facilities boom and it represents some exquisite opportunities for savvy investors.
In the past it was tasteless for a government branch to own the building it worked in, but today the trend is for the actual building to be owned by an investor or developer and merely leased to the agency. The government has realized that real estate proprietary is not necessarily consistent with its core mission and that they would rather have free cash flow instead of dormant equity. New buildings are being built to suit a particular government branch and then triple net leased (Nnn) to that agency. In addition, the government is monetizing existing equity by executing "sale and lease back" transactions whereby they sell buildings they currently own, grab the cash, and simply lease the building back from the new owner.
Developers that used to build hotels and shopping centers are now bidding on the building of court houses, government office buildings and post office warehouses. Investors who've recently been burned in conspiratorially owned industrial real estate are now lining up for the reliable wage that comes from owning real estate that is used by the government.
There are two huge advantages to investing in government real estate.
First, the Us Government has never missed a rent cost and has never reneged on a lease. Uncle Sam still enjoys the highest inherent prestige rating; they have taxing power, and if that fails they have printing presses. If you are landlord to the Government you will get paid.
The second (extremely important) factor that makes this real estate niche more involving than practically all others right now is the easy fact that financing is facilely available.
You can't get a loan to build a strip mall, an apartment building a motel or an industrial park today. America does not need or want any more industrial real estate list on the store right now; about 10% of what we already have is just sitting vacant. Capital is very tight and lending standards are very restrictive...unless you are buying, refinancing or building for the government.
Property owners, industrial real estate investors and developers with projects and buildings Nnn leased to the Federal Government or a Federal Government branch are not suffering the effects of the current prestige emergency that the rest of the business is struggling with. Funds are immediately available and not hard to qualify for if your tenant is Uncle Sam.
A unique and specialized lending platform called prestige tenant lease (Ctl) financing makes getting a loan against a government building relatively simple. Unlike traditional industrial mortgage lending, Ctl financing is underwritten based on the power of the tenant and the buildings of the lease rather than the creditworthiness of the borrower and the appraised value of the real property. With Ctl lending, if the tenant is strong and the lease is tight, you can get a loan.
Ctl loans are long term, non-recourse, fixed rate industrial mortgage loans that hold the lease and the wage it produces as the traditional collateral against the loan. Because of the straight send nature of Ctl lending, loan amounts are ordinarily much higher than normal, bank or Wall street loans. Many Ctl lenders will lend up to 100% of the value of the building (100% Ltv) or 100% of the cost of building (100% Ltc). The only restriction is that the rent collected must (slightly more than) cover the mortgage payment. Debt-service-coverage ratios (Dscr) are a very low 1.01-1.05.
Interest rates for Ctl loans are based on corresponding government bond rates with a small prime applied. Deals are funded by issuing secret placement mortgage backed bonds and selling them to fixed wage investors. Ctl loans can be written and concluded in 45-60 days from start to finish; much faster than approved industrial real estate financing that can take 90-200 days to complete.
In addition to the Feds, State, County and City Governments may also qualify if they have maintained a good prestige rating with proper & Poor's and Moody's.
The economic downturn and corresponding prestige crunch has devastated industrial and residential real estate alike. There is no doubt that it's tough out there, and rescue is going to take time. But opportunity can regularly be found in the midst of crisis. One of the opportunities for real estate professionals is clearly to be found in government real estate. The unprecedented increase in the sector means interrogate will be there. The availability of financing straight through Ctl means that the capital to fuel that increase will be there as well.
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