A Better Knowledge on Investment Grade Credit Tenants
The very first thing that you should know about the investment grade credit tenants is that this is a special offer of finances for the landlords.
There is a rating agency that gives an investment grade rating for the company called as the investment grade credit tenant. When there is a credit tenant that will rent a property then the lenders will have a special financing provided. This is the kind of special financing that focuses on the value and the tenant in its lease payments in the future. The investment grade tenants does not focus on the credit of the landlord or the real estate.
The rating of the tenant will as a matter of fact be the basis of the lenders of investment grade tenants. 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. What you need to know about the investment grade is that the rating has to be at least BBB-. 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.
The long term loans can as a matter of fact be availed of by the landlords when they have investment grade credit tenants. They can make use of the loans to refinance the property or purchase a property. The loans can also be structured in a way that is non recourse to the owner of the property. What will happen if one will push through with this option is that the personal liability of the landlord will be removed. The reason why this can happen is because of the fact that the underwriters will be relying on the lease value.
There is another thing that the investment grade credit tenants can do and that is to be able to have the direct financing obtained. The best way in order to be able to avail of this is to be able to enter the sale leaseback transaction. To be able to sell and lease to an investor is what the lender with an investment grade credit tenants can do. In terms of favorable terms, the property owner will now be able to earn cash. A higher loan to value is as a matter of fact what they can also have. This is something that you cannot find in the traditional commercial real estate loan.
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.