What is Credit Tenant Lease financing?
Credit Tenant Lease ("CTL") financing is a specialized capital solution in which a lender advances funds secured primarily by the contractual rental obligations of a creditworthy tenant—rather than the appraised value of the underlying real estate. This versatile structure can be tailored to a wide range of objectives, including construction-to-permanent financing, sale/leaseback transactions, property acquisitions, and the refinancing of existing debt through lease monetization. Borrowers can deploy proceeds to fund new development, acquire strategic properties, or unlock liquidity from existing real estate holdings to support broader corporate or institutional priorities.
Credit Tenant Lease Financing Structure
CTL financing combines the strengths of corporate credit analysis with real estate lending disciplines, resulting in a highly customized, long-term, fixed-rate loan with attractive leverage. Unlike conventional commercial mortgage lending—where loan proceeds are driven by property valuation—CTL financing is sized based on the creditworthiness of the underlying tenant, the structure and duration of the lease, and underlying contractual rental payments.
Learn more about why New Balance chose to work with us to finance their new LEED-certified headquarters.
Our Insights
Typical size
- $25 million - $100+ million per transaction
- Up to 100% loan-to-value
- Proceeds calibrated based on present value of future rental obligations under the lease
Structural characteristics
- Maturities of 20+ years with fully customized amortization schedules
- Long-term, fixed-rate debt providing confidence in cost
- Loan maturity aligned with the full lease term, eliminating refinancing and interest rate risk
- Below investment grade tenants considered on a case-by-case basis
- Ability to further customize financing to meet tenant and/or borrower objectives
Typical applications
- Financing for operationally critical, mission-essential assets
- Long-term, fixed-rate capital for investment-grade corporate, not-for-profit and government tenants
- Construction-to-permanent financing for purpose-built facilities
Why Borrowers Choose CTL Financing
- Tailored structuring expertise for complex real estate transactions
- Flexible currency options, including the ability to fund in local currency
- Seamless construction-to-permanent execution—a single financing from groundbreaking through stabilization
- No agency rating required
- Efficient, streamlined execution with a dedicated team focused on timely closing
*For illustrative purposes only. Availability, proceeds, pricing, and structure depend on a variety of factors including but not limited to: transaction-specific underwriting, tenant credit, lease terms, collateral, market conditions, and legal and tax considerations.
