Industrial

• Minimum 24’ clear height
• Dock-high loading, or combination of dock-high and surface-loading capability with levelers
• Minimum average tenant space of 10,000-15,000 square feet
• Optimal column spacing of 40’
• Full drive-around capability, with adequate turning radius
• Average lease term of three years or longer
• Staggered lease maturities
• No single tenant taking more than 30 percent of total space, unless investment grade tenant
• 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
• Land/building ratio no less than 2:1
• 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 an established “office market” or park
• 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)
• ‹ 60 percent LTV on multi-tenant properties
• ‹ 75 percent LTV on single-tenant properties with credit tenancy

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

• Low-density garden-style -- 20 units/acre or fewer preferred
• Mix of unit types
• One bath per bedroom
• Pitched roofs
• 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
• Prefer complexes in excess of 100 units
• 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

General Underwriting Positives

• Rapid or stepped amortization schedules
• Additional security (e.g., letter of credit or loan guarantees)
• Transactions larger than $20 million generally require significant coverage of debt service and expenses by credit tenants or leverage levels less than 60%
• Substantial pre-leasing on forwards
• Credit tenancy >80 percent coverage of debt service
• Low leverage

General Underwriting Negatives

• Within the 100-year flood plain
• R & D, flex- or 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%

• 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