Industrial

• Minimum 16’ clear height
• Dock-high loading, or combination of dock-high and surface-loading capability with levelers
• Full drive-around capability, with adequate turning radius
• Average lease term of three years or longer
• Staggered lease maturities
• Concrete tilt-up or concrete masonry unit is optimal
• Maximum office build-out of 20 percent (used for underwriting rents)
• Located in an industrial park or industrial area
• Concrete loading pads
• Dock distribution along long axis of building
• Near an interstate access ramp
• Early suppression, fast-response sprinkler system

Retail

• Grocery-anchored neighborhood centers
• Well-located neighborhood centers with market-dominant, non-investment-grade anchor tenants in non-cyclical market segments
• In-fill, unanchored retail center
• Prefer not to finance only a portion of a center (e.g. no “carve-outs,” party walls or parking via easement)
• Parking ratio 5/1,000 square feet
• Center should parallel major thoroughfare; elbow and less visible space discounted
• Prefer major metropolitan area locations
• Outparcel development should not obstruct visibility of shop space or signage
• Second levels and mixed-use properties considered on case-by-case basis

Office

• Prefer newer, multi-level, class “A” projects
• Adequate elevator capacity and fully sprinklered
• Minimum lease terms of five years preferred, with staggered expirations
• Net leases or fixed expense stops required
• Parking ratio › 4/1,000 square feet
• Located in area with demand drivers for alternative uses
• High proportion of investment-grade tenancy
• Floor plates of 12,000 square feet or greater
• Underwriting will include an allowance for turnover costs (e.g. tenant improvements and lease commissions)
• Significant land value

Medical Office

• Substantially owner-occupied or occupied by credit-worthy tenants on long-term leases
• All physician owners must guarantee the note
• Joint and several liability preferred over pro-rata
• Prefer newer projects with quality construction
• Adequate elevator capacity and fully sprinklered
• Parking ratio › 5/1,000 square feet
• Loan amount per doctor ratio preferably $1,000,000 or less
• Adjacent to or near market-dominant hospitals

Apartments

• Mix of unit types
• One bath per bedroom preferred
• Pitched roofs preferred
• Low-maintenance exterior (e.g. masonry, fiber cement or vinyl siding)
• Interior entrances
• Desired unit features: washer/dryer, ceiling fans, 9-foot ceilings, fireplaces, storage areas, patio or balcony
• Full amenity package, including clubhouse, pool, business center, etc.
• One parking space per bedroom
• Separate metering for all utilities except water

Build-to-Suit and/or Owner-Occupied Parameters

• Typical real estate considerations still apply
• Minimum 10-year lease term or direct corporate obligation
• Significant amortization over primary lease term
• Full or partial personal liability of partners, principals or primary shareholders of owner-occupied properties when tenant is closely held
• Loan amount must be justified by market rents
• Building preferably adaptable to multi-tenant use
• Land value hang-out at “prime” rates
• Hang-out beyond leases as supported by the market

Self-Storage

• Mix of unit types
• In-fill with multiple demand drivers for storage needs (e.g. corporate, residential, student, etc.)
• Prefer major metropolitan area locations
• Low-maintenance exterior (e.g. masonry, fiber cement or vinyl siding)
• Sponsors with significant experience owning and managing self-storage properties
• Desired unit features: indoor and outdoor units, climate control, drive-up units, etc.
• Amenity package, including on-site office and manager, security features, gated access, insurance, moving supplies, etc.

General Underwriting Positives

• Rapid or stepped amortization schedules
• Additional security (e.g., letter of credit or loan guarantees)
• Credit tenancy >80 percent coverage of debt service
• Low leverage

General Underwriting Negatives

• Within the 100-year flood plain
• Low-ceiling warehouse space (16’ or less discouraged)
• Under-performing property based on market averages
• Poor access and/or visibility
• Multi-tenant office transaction with leverage level >60%
• Lack of appropriate insurance coverage

• Detailed physical description of improvements
• Major tenant lease/lease reviews
• Three to five years of operating history on property

• Demographic profile study (population facts), including radius ring maps
• Site plan
• Financial statements on principals and credit tenants

• Photos of property and surrounding area
• Sales history for anchored retail
• Rent roll
• Disclosure of any existing or potential negative environmental condition