Credit Rated Definition

Credit rated identifies whether the tenant is an investment grade tenant with a BBB- rating or higher (as rated by Standard & Poor's ).

So why is this important to know?

The credit of your tenant makes all the difference in commercial financing. The credit worthiness of the tenant as well as the lease terms is seen as a safe "risk" for a lender, so therefore, they are willing to lend on good terms.

For instance, I have a lender that loves lending to the developers of single, credit tenant buildings. This lender will loan the developer 100% of the acquisition and construction costs, secured by the leases.

There is also attractive financing available to the purchasers of these types of properties. They can also get 100% financing with DSCRs as low as 1.00x. Again secured by the lease.

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