Adjustable Commercial Mortgage
Adjustable commercial mortgage funding is a real estate loan with an interest rate that changes periodically, according to an index that is selected when the mortgage is issued. With an ARM (Adjustable Rate Mortgage), you might qualify for a larger loan and your ARM could be less expensive than a fixed rate loan over a long period.
There are a variety of programs to choose from:
- Easy in/easy out
- Variable/convertible loan
- Adjustable rate with a future option to increase loan
- Simple interest loans with or without graduated payments
- . . . and more
To compare one ARM with another or with a fixed rate mortgage, you need to know about indexes, margins, discounts, cap structures, negative amortization and convertibility. Let us guide you through the process of making a well informed decision.
| Property Types: |
Single Tenant Retail, Warehouse/Distribution and Corporate
Office properties on separate tax parcel. |
| Loan Sizing : |
$2 million to $300 million; single properties or multi-property
portfolios. (portfolios encouraged). |
| Loan-to-Value: |
No traditional LTV restrictions. (not to exceed 100% LTV). |
| Loan Term: |
Typically fully amortizing with Lease term or amortization
beyond loan term. |
| Amortization: |
Fully amortizing for the lease term. |
| Interest Rate: |
"On-the-run" US Treasury plus a spread. Interest calculation
is 30/360. |
| Debt Service: |
1.00x to 1.01x for leases without landlord obligations; 1.05x for
all others. |
| Personal: |
Non-recourse, except for standard carve-outs. |
| Prepayment: |
Yield Maintenance based on a US Treasury plus 50 basis points,
with no lockout period. |
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