Investments – Getting Started & Next Steps
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. If there is a property that is rented by the credit tenant then what will happen is that the lenders will offer a special financing. 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.
The lenders of the investment grade tenants 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 are a lot of investors that would invest in similar products and bonds as well. As a matter of fact, the states and cities rank as well as participants in the investment grade credit tenants.
Most of the time, the landlords that have investment grade credit tenants are able to avail of long term loans. To be able to refinance the property or even buy a property are some of the options that they have for the loans. To be a non recourse to the owner of the property is one way to be able to structure the loans. At the end of the day, pushing through with this option will now mean that the personal liability of the landlord will now be removed. The main reason why it is possible is because of the fact that what the underwriters will do is that they 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. This is something that you cannot find in the traditional commercial real estate loan.
For the property owners that are in need of the loans at the soonest possible time can in fact avail of the investment grade credit tenants. There is a great deal of benefits that people can enjoy with the investment grade credit tenants.
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