A Better Knowledge on Investment Grade Credit Tenants
A special financing offer for the landlords is what is called as the investment grade credit tenants and this is what you need to know first.
The investment grade credit tenant is a kind of company that is able to have an investment grade rating from the rating agency. If there is a property that is rented by the credit tenant then what will happen is that the lenders will offer a special financing. This is the kind of special financing that focuses on the value and the tenant in its lease payments in the future. The investment grade tenants does not focus on the credit of the landlord or the real estate.
What you need to know about the lenders of the investment grade tenants is that it will based on the rating of the tenant. To sell the institutional investors and securitize the loans is the reason why this is done. The most important thing that you need to know about the investment grade is that the rating has to be at least BBB-. There are a lot of investors that would invest in similar products and bonds as well. The participants that are able to rank in the investment grade credit tenants are the states and cities as well.
The long term loans can as a matter of fact be availed of by the landlords when they have investment grade credit tenants. To be able to refinance the property or even buy a property are some of the options that they have for the loans. When it comes to the loans they can actually be structured in a way that it will now be non recourse to the owner of the property. This will mean that the threat of personal liability will be removed. The reason why this can happen is because of the fact that the underwriters will be relying on the lease value.
The investment grade credit tenants also has the option to be able to obtain direct financing. The best way in order to be able to avail of this is to be able to enter the sale leaseback transaction. What the lenders with the investment grade credit tenants do is that they can sell and lease to an investor. In terms of favorable terms, the property owner will now be able to earn cash. A higher loan to value is as a matter of fact what they can also have. What you need to know about this is that you will not be able to find this in the traditional commercial real estate loan.
The investment grade credit tenants can actually be availed of by the property owners that are in need of loans at the soonest possible time. The investment grade credit tenants will be able to avail of the benefits.