A commercial real estate loan is a mortgage secured by income-producing property used for business or investment purposes rather than owner-occupied residential use. Commercial loans are available for a wide range of property types including multifamily (5+ units), office, retail, industrial, mixed-use, hospitality, and self-storage assets. Unlike residential mortgages, which are primarily underwritten based on the borrower's personal income and credit, commercial real estate loans are evaluated primarily on the property's net operating income (NOI), debt service coverage ratio (DSCR), loan-to-value (LTV), and the overall financial strength of the borrowing entity. Loan terms, amortization schedules, and recourse structures vary significantly across lender types — including banks, credit unions, CMBS lenders, life insurance companies, and debt funds — making lender selection a critical component of the financing strategy.

The commercial real estate lending market includes several distinct product categories. Conventional commercial mortgages offered by banks and credit unions are typically the most competitive for stabilized, income-producing assets with strong borrower profiles. CMBS (Commercial Mortgage-Backed Securities) loans offer non-recourse financing at competitive rates for larger, stabilized properties. Bridge loans provide short-term financing for properties in transition — value-add acquisitions, lease-up situations, or assets requiring renovation before permanent financing is available. Mezzanine financing and preferred equity fill gaps in the capital stack above senior debt. Construction loans fund ground-up commercial development. Our advisors assess which product type and lender category is most appropriate for your specific asset and investment strategy.

Commercial real estate financing serves a broad spectrum of borrowers including experienced real estate investors acquiring or refinancing income-producing properties, business owners purchasing the real estate their business occupies (owner-user commercial), developers financing ground-up construction or substantial renovation, family offices and high net worth individuals building diversified real estate portfolios, and operators in specific asset classes such as multifamily, hospitality, or industrial. The complexity of commercial lending — variable underwriting standards, negotiable terms, and wide rate dispersion across lender types — makes independent fiduciary advisory particularly valuable in this space, where a sophisticated borrower without expert guidance frequently leaves significant value on the table.

Commercial real estate loan qualification is assessed at both the property and borrower level. Property-level metrics include DSCR (typically 1.20–1.35x minimum), LTV (generally 65–75% for most asset types), occupancy rates, lease terms, and net operating income. Borrower-level requirements include net worth and liquidity (many lenders require net worth equal to the loan amount and liquidity of 10% of the loan amount), credit score (typically 650+), and prior commercial real estate experience. Loan terms range from 5 to 30 years with amortization periods of 20 to 30 years, and many commercial loans include balloon payments at the end of the initial term. Personal guarantees are common in bank lending but may be negotiated away in CMBS and institutional products for strong sponsorship.

Commercial real estate debt is one of the most powerful wealth-building tools available to sophisticated investors — providing leverage on income-producing assets, potential appreciation, and tax advantages through depreciation and interest deductibility. The advantages of commercial financing include the ability to acquire large assets with institutional leverage, non-recourse options for qualified sponsors, and a wide range of lender types and structures that create genuine market competition. Key considerations include higher complexity and longer closing timelines than residential financing, the need for environmental and property condition assessments, personal guarantee requirements in many bank products, and rate and fee structures that vary dramatically by lender type. Our advisors navigate this complexity on your behalf — sourcing, comparing, and negotiating commercial loan terms across our lender network to identify the most advantageous capital structure for your acquisition or refinance.