A Basic Knowledge on Investment Grade Credit Tenants
A special financing offer for the landlords is what is called as the investment grade credit tenants and this is what you need to know first.
Another thing that you need to know about the investment grade credit tenant is that this is a company that receives an investment grade rating from the rating agency. A special financing will be provided by the lender when there is a credit tenant that will rent on a property. It is actually on the value and the tenant in its lease payments in the future wherein the focus of the special financing is placed. Actually, the focus of these investment grade tenants is not on the credit of the landlord and not on the real estate as well.
What you need to know about the lenders of the investment grade tenants is that it will based on the rating of the tenant. The main reason as to why this is being done is so that it will be possible to sell the institutional investors and securitize the loans. A rating of at the very least a BBB- is what you need to know about the investment grade. Investing in similar products and bonds is as a matter of fact what a lot of investors would gladly do. As a matter of fact, the states and cities rank as well as participants in the investment grade credit tenants.
Most of the time, the landlords that have investment grade credit tenants are able to avail of long term loans. When they have the loans, they have the option to be able to refinance the property or even buy a property. To be a non recourse to the owner of the property is one way to be able to structure the loans. At the end of the day, pushing through with this option will now mean that the personal liability of the landlord will now be removed. The underwriters will be able to rely on the lease value which is why this can be possible.
There is another thing that the investment grade credit tenants can do and that is to be able to have the direct financing obtained. To enter into the sale leaseback transaction is as a matter of fact how this can be done. To be able to sell and lease to an investor is what the lender with an investment grade credit tenants can do. On favorable terms the property owner will be able to earn cash. This also means that they now have the opportunity to have a higher loan to value. When it comes to the traditional real estate loan, you will actually not be able to find this in here.
Therefore, the property owners that are in need of loans as soon as possible can avail of the investment grade credit tenants. The investment grade credit tenants will be able to avail of the benefits.