Light Industrial Loan Program Summary

Property Types:

Modern light-industrial buildings in suitably zoned commercial or industrial areas. Strong preference for properties located within planned industrial parks in cities where industrial market is strong and occupancies are high. Preference for high-ceiling warehouse and distribution buildings rather than R&D or service center space. Buildings are required to possess all functional requirements of accessibility, parking, loading, utilities, and fire protection.

Leasing:

Properties should be substantially leased for terms consistent with the local market, but generally not less than five years. Multi-tenant buildings leased to third-party users are preferred but single tenant buildings will be considered subject to credit review. Reserves will be required for loss of revenue and refit/leasing costs.

Property Age:

Facilities should have been completed and in operation for at least 12 months. Properties built or substantially renovated since 1975 are preferred.

Loan Limits:

The loan-to-value ratio may not exceed 80%. The minimum debt service coverage ratio is 120%. Lower coverage ratios may be accepted for facilities leased to credit-worthy tenants on a long term basis.

Occupancy:

Occupancy should be a minimum of 85%. The facility should be located in a market area in which demand is expected to increase.

Borrowing Entity:

Generally, a single purpose entity is require

Loan Terms:

5, 7 and 10 year terms are available at the borrower's option. Amortization is on a 15-25 year term. On newer buildings, amortization can be as high as 30 years.

Rates:

The interest rate is set at a fixed spread over comparable term treasuries, and varies based on coverage ratios. A variable interest rate floating at a spread over the 1 month LIBOR is available. Please call for current rate and spread quotes.

Guarantees:

The loans are generally expected to be non-recourse except for normal lender carve-outs.

Assumable:

Yes, with consent and payment of a 1% assumption fee.

Reserves

Tax and insurance reserves are required. Also, a replacement reserve account is to be established and funded to provide for capital replacements and re-leasing costs and rental interruption.

Prepayment:

Prepayment will be prohibited for some period, depending on the term, and then be subject to defeasance or yield maintenance until the final six months, during which prepayment is allowed without penalty.

Use of Proceeds:

Loans are available for both purchase and refinance transactions.