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.
Another thing that you need to know about the investment grade credit tenant is that this is a company that receives an investment grade rating from the rating agency. A special financing will be provided by the lender when there is a credit tenant that will rent on a property. It is actually on the value and the tenant in its lease payments in the future wherein the focus of the special financing is placed. The focus of the investment grade tenants is not 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. The main reason as to why this is being done is so that it will be possible to sell the institutional investors and securitize the loans. What you need to know about the investment grade is that the rating has to be at least BBB-. There is one thing that you need to know about the investors and that is the fact that they would gladly 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. When they have the loans, they have the option to be able to refinance the property or even buy a property. To be a non recourse to the owner of the property is one way to be able to structure the loans. 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.
To be able to obtain the direct financing is as a matter of fact what the investment grade credit tenants can also do. The best way to be able to do this is through the entering of the sale leaseback transaction. To be able to sell and lease to an investor is what the lender with an investment grade credit tenants can do. On favorable terms the property owner will be able to earn cash. They will also be able to have a higher loan to value. When it comes to the traditional real estate loan, you will actually not be able to find this in here.
Therefore, the property owners that are in need of loans as soon as possible can avail of the investment grade credit tenants. The investment grade credit tenants will be able to avail of the benefits.
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