Credit Tenant Lease Financing (CTL)
Commercial real estate investors often face challenges in sourcing the right loan to support their unique investment strategies. At The Madison Group, we simplify this process by arranging alternative financing solutions from the nation’s top lenders, ensuring you secure the optimal financing to meet your long-term investment objectives.
The Madison Group is a nationwide leader in providing commercial real estate capital for Credit Tenant Lease (CTL) Financing. CTL financing is an attractive option for securing stable returns with reduced risk, offering our clients competitive loan terms for the acquisition, refinancing, or recapitalization of CTL assets.
Eligible Credit Tenants for CTL Financing:
- Retail: Drugstores, pharmacies, home improvement stores, grocery stores, big-box retailers, convenience stores, bank branches, U.S. Federal Buildings, local government properties, municipal buildings, and quasi-governmental entities (authorities, park districts, etc.)
- Institutional: Healthcare facilities, medical offices, administrative buildings, clinics, colleges, and universities
- Corporate: Single-tenant office buildings, manufacturing facilities, distribution centers, and data centers
Advantages of CTL Financing:
Unlike traditional real estate loans, which are typically based on the value of the land and the borrower's creditworthiness, CTL financing focuses primarily on the credit quality of the tenant and the lease structure to determine the loan terms. This approach provides several key advantages, including:
- Tighter Pricing: CTL financing often offers more favorable pricing compared to conventional real estate loans.
- Lower Debt Service Coverage Ratios (DSCR): Reduced DSCR requirements provide more favorable terms.
- Higher Loan Proceeds: Maximum loan amounts are available based on the tenant’s credit quality and lease terms.
- Greater Liquidity: CTL financing sometimes offers higher leverage, reducing your downpayment.
| Loan limits | Starting at a minimum of $1,000,000
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| Rates | Competitive market pricing, with both fixed and floating rate options |
| Terms | 5, 7, 10, 15, 20, 25, and 30-year fixed-rate terms
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| Amortization | 25 to 30 Year Amortization |
| Prepayment | Multiple prepayment options, including no prepayment penalties |
| Recourse | Recourse and non-recourse options available (subject to standard carve outs) |
| DSCR | Minimum 1.0 to 1.05 DSCR |
| LTV | Up to 90% LTV/LTC |
| Assumable | Yes, to a qualified borrower. |
| Property types | Single tenant retail, corporate office, Industrial (warehouse distribution), U.S. Government leased properties, large multi-property portfolios |
| Geographic areas | Available in most states across the U.S.
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How You Benefit from Working with The Madison Group:
- Increase Cash Flow: Benefit from tailored financing solutions designed to maximize your cash flow.
- Save Time: Let TMG source the best rates and terms, allowing you to focus on your investment strategy.
- Avoid Pitfalls: Our in-depth analysis ensures you avoid costly surprises and make informed decisions.
- Access Multiple Lenders: Receive financing offers from a variety of top lenders, giving you access to diverse loan programs.
- Expert Guidance: Our experienced team of commercial real estate lending professionals is with you every step of the way.
By partnering with The Madison Group, you gain access to the expertise, resources, and support necessary to secure the best financing solutions for your office building investment.