Single Tenant Non-Investment Grade Definition

A single tenant non-investment grade, is a retail property where the property is net leased to one tenant that has a credit rating of BBB- or lower.

Why is this important?

The credit of the tenant is more important to a lender than the borrower! If the tenant's credit isn't stellar, lenders will charge higher rates and offer lower LTV's to borrowers.

When considering commercial property, not only is it important to verify the lease but you must also verify the credit of the tenants. And just because a company is well-known, don't automatically assume that they have good credit! To check the investment status of tenant, use Standard & Poor's.

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