What impact if any, has the length of the initial lease term had on your ability to borrow from banks for a new construction/acquisition?
We're about to propose a lease agreement to a tenant for a 10 year lease with a 10yr ROR, and will then begin approaching banks for a mortgage over a 15 year period, to finance the construction of the new office.
Based on your experience, are we better to align the initial lease term with the proposed mortgage term? i.e. 15 year term with a 10 year RoR?
We have sufficient equity to cover the loan, and the tenant is relatively speaking low risk, with a high likelihood that we are able to re-let the property should something occur to the tenant.
We're about to propose a lease agreement to a tenant for a 10 year lease with a 10yr ROR, and will then begin approaching banks for a mortgage over a 15 year period, to finance the construction of the new office.
Based on your experience, are we better to align the initial lease term with the proposed mortgage term? i.e. 15 year term with a 10 year RoR?
We have sufficient equity to cover the loan, and the tenant is relatively speaking low risk, with a high likelihood that we are able to re-let the property should something occur to the tenant.
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