Owner-Occupied
Your business operates out of the property and usually occupies at least 51% of the space. Lenders may focus heavily on your operating company’s financial performance.
Commercial Real Estate Loans
What Is a Commercial Real Estate Loan?
A commercial real estate (CRE) loan is a mortgage secured by income-producing or business-occupied property—such as office buildings, retail centers, warehouses, mixed-use properties, and more. Terms are designed around the property’s cash flow, value, and your experience as an investor or business owner.
Property Types Commonly Financed
- Office buildings and medical/dental office condos.
- Retail strips, stand-alone storefronts, and mixed-use buildings.
- Industrial and warehouse properties.
- Owner-occupied buildings for professional services, trades, or light manufacturing.
- Some specialty properties on a case-by-case basis.
Owner-Occupied vs. Investment CRE
Investment / Multi-Tenant
The property is primarily leased to tenants. Underwriting emphasizes rent roll, leases, and the property’s ability to generate stable income.
Common Uses for CRE Loans
- Purchasing a building for your business instead of renting.
- Acquiring investment property for long-term cash flow and appreciation.
- Refinancing an existing commercial mortgage to improve rate or terms.
- Pulling out equity (cash-out refinance) for expansion, equipment, or other investments.
- Renovating or re-tenanting a property to increase value.
Key Deal Terms & Structures
- Loan-to-Value (LTV): Often up to 65–80% of property value, depending on type and risk.
- Terms: Commonly 5–25 years (sometimes with balloon payments after 5–10 years).
- Rates: Fixed or variable, depending on the program and credit profile.
- Amortization: Often 20–25 years for many property types.
- Recourse vs. Non-Recourse: Some loans may require personal guarantees; others may be primarily collateral-based.
Example Scenarios
Scenario 1 – Business Buying Its First Building
A professional services firm has outgrown its leased space and finds an office condo. A commercial real estate loan covers most of the purchase price. Monthly mortgage payments are comparable to, or lower than, the rent they were paying, and they start building equity in an owned asset.
Scenario 2 – Investor Refinancing a Retail Strip
An investor owns a fully leased retail center with a maturing loan. Refinancing into a new CRE loan locks in a longer term and more stable rate, while also pulling out some equity to fund another acquisition.
Scenario 3 – Warehouse Renovation
A logistics company purchases an older warehouse that needs upgrades and office build-out. The commercial real estate loan includes renovation funds, allowing improvements that support higher rents and better operations.
What Lenders Look At
CRE lenders focus on both the **property** and the **people behind it**. They typically review:
- Property type, location, condition, and market trends.
- Current and projected income (rent roll, leases, operating statements).
- Debt service coverage ratio (DSCR) – how comfortably income covers payments.
- Borrower strength: credit, net worth, liquidity, and experience.
- Business financials if the property is owner-occupied.
What You May Need to Provide
- Property details: address, photos, purchase contract, or existing loan statements.
- Rent roll and copies of major leases (for investment properties).
- Operating statements and historical income/expense data.
- Business financials and tax returns (for owner-occupied deals).
- Personal financial statement, tax returns, and a schedule of real estate owned.
CRE Loans vs. Bridge Loans
A commercial real estate loan is typically your **longer-term, stabilized financing**, while a bridge loan is a **short-term tool** to close quickly or fund a transition (like renovations or lease-up). In many cases, an investor uses a bridge loan first, then refinances into a traditional CRE loan once the property is stabilized.
How Fast Finance Helps
Fast Finance listens to your goals—whether that’s occupying your own building, growing a portfolio, or improving terms on a current loan—and then introduces you to commercial real estate lenders that fit your scenario. We help you compare:
- Rate and fee structures across different lenders.
- Loan-to-value and term options for your property type.
- Pros and cons of recourse vs. non-recourse structures.
- Whether an SBA-backed option (for owner-occupied) might be a better fit.
Ready to see what’s possible with your next property purchase or refinance? Check my CRE loan options