Credit Tenant Lease (“CTL”) Financing is a method of financing real estate in which the landlord / owner borrows money to finance the development or purchase of a property and pledges as security rent to be received from the tenant and a mortgage on the property.
CTLs are hybrid financings consisting of elements of corporate finance and real estate finance, resulting in a long-term, highly leveraged, customized loan. Unlike a typical commercial real estate loan which is underwritten and sized based on the property value, CTLs are sized based on the underlying lessee’s credit rating, lease structure and rental payments.
Benefits of CTL financing via Prudential Private Capital include:
- Up to 100% LTV funding
- DSCRs as low as 1.0x
- Long-term commitments for 15-25+ years
- Lower transaction costs by combining construction and permanent financing
- Non-recourse owner financing
- Quick response and fast turnaround, with no lender fees
- Interest rates similar to investment grade debt pricing
- Relationship-oriented approach in which our dedicated team oversees all aspects of the financing, from origination/structuring through lease expiration
With over $5 billion invested in CTL financing since 2004, our team has the experience and know-how to help you determine if a CTL loan is the right fit for your project.