Financing Net Leased Commercial Real Estate

The majority of net leased commercial real estate is traded between $1 million and $5 million. Investment borrowers, also known as sponsors, will need a down payment of 20-25% of the purchase price and some cases 40% of the purchase price. The higher down payment increases cash flow, especially on properties with lower cap rates and long term leases.

For owner-users, 85% financing is available through the SBA 7(a) program. For experienced developers, 100% financing may be available with a secured long-term, investment grade tenant for their commercial site. Non-recourse and partial recourse guarantees depend on the loan-to-value, credit of the borrower, and credit of the tenant.

In 2022, interest rates range from 5% to 6%. Fixed rates are typically 5 -year, 7-year, or 10-year terms. Amortization ranges from 20 to 30 years. The entire lending process takes approximately 45 days to fund once the property is under contract.

Credit: Secure Net Lease and Jerry Kachel Builder

7-Eleven
3798 South Western Avenue
Chicago, IL

• Price: $7,714,000

• Cap Rate: 5.00%

• NOI: $385,700

• Rentable SQFT: 4,650 SF

• Year Built: 2023

• Lot Size: 0.96 +/- Acres

• Lease Type: Absolute NNN

Need financing for a net leased property? Learn more about our Retail Loan Programs!