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Credit Tenant Lease (CTL) Financing

CTL financing provides borrowers and occupiers a source of long-term, fixed-rate financing on a non-recourse basis. Agnostic to traditional real estate attributes, this type of financing focuses on the financial profile of the lessee, which works with public corporations, private companies and not-for-profit institutions alike.

CTL Financing Overview

This option often results in a cheaper cost of capital made available to borrowers than other forms of real estate financing. Loans can be custom tailored based upon borrower's needs and can provide financing terms up to 30+ years with balloon structures available. CTL financing typically ranges from $10 million to $500 million with no ceiling on loan amount.  Diverging from conventional real estate loan metrics, CTL financing allows for debt service coverage ratios as tight as 1.0X with max loan-to-value of 100%.

While this all sounds attractive, how do you know when you should consider CTL financing?

Here are some examples:

  • Owner looking for a source of high leverage construction-to-permanent financing
  • Investor seeking to retain ownership while paying off existing loan and recapture owner's equity
  • Borrower seeking long-term low-leverage loan at cheapest cost of capital (interest only & balloon structures available) 
  • Owner seeking to finance their fee interest in a long term ground lease 
  • Borrower seeking a leverage level not supported by local real estate market metrics
  • Investor pursuing a tax advantaged, high-leverage recapitalization (synthetic sale)
  • Company seeks to pursue outside funding source in order to preserve borrowing capacity and/or financial profile

Learn more about why this funding option is ideal in our current economic climate

Our Experience

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