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Commercial Mortgage Loans |
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| Why Choose Capital Assets,Inc |
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| Capital Assets,Inc has the knowledge,
expertise and strategic relationships required to
provide you with the most competitive rates and terms
for your commercial property loan. |
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Multiple commercial financing options
- Competitive interest rates, terms and costs
- Knowledgeable and seasoned commercial mortgage
specialists
- Certainty of execution
- Convenient electronic loan process saves you
time and money
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about the property and commercial real estate financing you’re
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Home >
Commercial Loan Center Refinance or Purchase |
Multifamily Investment Property
Classifications
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Capital Assets provides multifamily housing and apartment loans
where the building is classified as ?A?, ?B?, and ?C? as
long as they are acceptable to Lender in both physical
condition and market attributes. The building
classifications are as follow and may vary from market
to market. |
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Multifamily Property
Classifications Overview
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Class A
Multifamily |
- Generally, garden product built within
the last 10 years
- Properties with a physical age greater
than 10 years but have been substantially
renovated
- High-rise product in select Central
Business District may be over 20 years old
- Commands rents within the range of Class
?A? rents in the submarket
- Well merchandised with landscaping,
attractive rental office and/or club
building
- High-end exterior and interior amenities
as dictated by other Class ?A? products in
the market
- High quality construction with highest
quality materials
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Class B Multifamily |
- Generally, product built within the last
20 years
- Exterior and interior amenity package is
dated and less than what is offered by
properties in the high end of the market
- Good quality construction with little
deferred maintenance
- Commands rents within the range of Class
?B? rents in the submarket
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Class C Multifamily |
- Generally, product built within the last
30 years
- Limited, dated exterior and interior
amenity package
- Improvements show some age and deferred
maintenance
- Commands rents below Class ?B? rents in
submarket
- Majority of appliances are ?original”
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Class D Multifamily |
- Generally, product over 30 years old,
worn properties, operationally more
transient, situated in fringe or mediocre
locations
- Shorter remaining economic lives for the
system components
- No amenity package offered
- Marginal construction quality and
condition
- Lower side of the market unit rent
range, coupled with intensive use of the
property (turnover and density of use)
combine to constrain budget for operations
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What You Need to Know
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Class A assets — and Class B
assets located in major markets — typically command
more interest from lenders. Life companies, pensions,
REITs, agency lenders and conduits aggressively pursue
Class A assets. As a result, you can expect:
- More financing options
- Lower rates
- Longer fixed rate terms and amortizations
- Higher leverage (up to 80% with options for
mezzanine debt or equity)
- Asset is primary source of collateral with no
personal guarantees (non-recourse)
- Lower debt service coverage requirements (as low
as 1.15:1)
- Depending on the market, CAP rates in the 4%-6%
range
Class B and C assets lose some interest
from institutional investors and borrowers typically
obtain financing from banks, agency lenders and specific
purpose REITs. As a result, you can expect:
- Fewer financing options
- Slightly higher rates
- Fixed rate with balloon terms or 5 year resets
- 75% leverage with no option for secondary debt
- Non-recourse for assets located in major markets
- Recourse for assets located in secondary and
tertiary markets
- Depending on the market, CAP rates in the 6%-8%
range
Class C and D assets tend to be
financed by local banks with little to no interest from
secondary market lenders. As a result, you can expect:
- Limited financing options
- Rates 100-200 bps higher than higher quality
assets
- Shorter fixed or floating rate terms
- 65% (75% for strong sponsors in major markets)
leverage with no option for secondary debt
- Personal recourse
- Depending on the market, CAP rates north of 8%
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