Loan Products

Loan Products

Credit Tenant Lease Loans

A Credit Tenant Lease backed loan (“CTL”) is the foundational loan product of CTL Capital. A CTL loan focuses primarily on the creditworthiness of the tenant over the term of the lease and is structured to be coterminous with the credit tenant lease, providing long term, fixed-rate, efficient capital market financing. Traditional commercial real estate financing focus primarily on the real collateral and borrower with shorter term loans, typically with higher relative pricing and leverage constraints

CTL Loans are typically utilized for single-tenant properties but can be applied to any lease with investment grade (public or privately rated) tenant.

Some sample terms of a typical Credit Tenant Loan include:
Loan Amount
$10mm minimum; no maximum
Coterminous with lease term
Self or extended amortization
Up to 100% LTV
As low as 1.0x for Bond type/NNN, 1.05+ for NN and modified gross
Interest Rate
Fixed Rate, determined by capital market bond pricing of underlying Tenant’s credit and liquidity premium
Yield Maintenance; defeasance
First-lien mortgage
Borrowing Entity
Special Purpose Entity (DST allowed)
Lease Term: Non-recourse excepting standard carve outs
Construction Period: Recourse with completion guarantee
Third Party Reports
MAI appraisal; Phase I; survey; title. Standard construction reports.
Fully assignable subject to OFAC/KYC
None on NNN/Bond lease. Minimal on NN/modified gross

Sale-Leaseback Financing

Credit Tenant Lease Financing is exceptionally well suited for Sale Leaseback Transactions where a property owner sells a property and simultaneously leases it back on a long-term lease from the buyer.
Credit tenants that own/occupy properties and are not in the business of owning commercial real estate frequently utilize Sale Leaseback Transactions as an attractive strategy to unlock market value from otherwise illiquid assets to redeploy the capital in its core competencies, free up capital for expansion, or payoff high interest debts.

Construction/Permanent and Build-to-Suit (BTS) Development Loans

CTL Capital provides one-stop construction/permanent financing for to-be-built properties leased to investment grade rated tenants. Utilizing a CTL Loan for Build To Suit or other leased construction projects provides significant benefits to both the prospective tenant and developer including:

Bifurcated Ground Lease Financing

Bifurcated Ground Lease Financing is a structured form of commercial real estate financing where the Leased Fee Interest (the land) is bifurcated from the Leasehold Interest (improvements) creating a legal separation of the property’s land from its improvements. CTL Capital provides Ground Lease Financing for existing ground leases or qualified properties where a bifurcated ground lease can be created.

Bifurcation creates two estates, subject to the terms of the ground lease, that can be separately owned and financed, allowing the sponsor to maximize leverage and increase equity returns. Typically, the Ground Lease is an absolute net lease with a 50-99 year term which allows for fixed-rate, long term (30-40 years) senior debt funded by the Ground Lease payments.

The land component allocation of the building relative to the property’s stabilized value is typically from 25-45% yielding ground rent coverage of 3-5x the property’s gross NOI. The overall cost of capital to sponsors is lower than a senior or mezzanine financing structure, providing low cost permanent capital with no balloon risk.

Structured Debt Products

CTL Capital also provides debt capital solutions for similarly structured debt products on a case by case basis.