This category includes the following types of real estate:
|
 Hotels
|
|
Self Storage
|
|
Built-to-suit
|
|
Land financing
|
Hotels
|
|
Most traditional Canadian Lenders only provide mortgage financing on hotels on a very selective basis. Foreign Lenders are more aggressive on hotel financing, particularly Lenders from the United States. The most important attributes of a hotel from a lending perspective are (i) consistent operating profits during the previous 2-3 years, and (ii) a well-known flag (Holiday Inn, Radisson, Quality Inn, etc.).
|
Self Storage
|
|
An area of the market that has grown in popularity within the lending community are self-storage buildings. Aggressive financing is available for facilities with consistent occupancy rates above 85%.
|
Built-to-Suit Properties
|
|
These are properties which are built for a specific user. The financibility of these properties is dependent on (i) the tenant quality, (ii) the lease rate versus market rates, (iii) the term of the lease (should be at least 7-10 years), and (iv) alternate uses for the properties. If most of these attributes are favourable, very competitive mortgage financing can be achieved.
|
Land Financing
|
|
Land financing is easiest to arrange where zoning is in place and development can occur immediately. Residential zoning is the most desirable zoning from the perspective of the lending community. The longer the time frame to development, the more difficult land financing is to obtain. This type of financing is often provided by "near banks" and private lenders (as opposed to financial institutions).
|
Financing Terms Available:
|
|
Loan to Value
|
up to 80% for self-storages and built-to-suit;
60% to 75% for hotels and land financing.
|
|
Interest Rates
|
fixed and floating interest rates are
generally available |
|
Amortization
|
up to 25 years for newer developments.
|
|
Minimum Debt Service
|
variable, depending on the transaction.
|
|
Non-Recourse
|
recourse is largely dependant on
the risk profile of the loan.
|
|
|
|
BACK TO TOP
|
|
