Commercial Real Estate Loans

  • Commercial Real Estate CRE loans exist to finance property that is used for business-related purposes, such as shopping malls, warehouses, apartment complexes and office buildings. A CRE loan can be used to buy a new property, renovate existing income-producing property or refinance debt on a commercial property you already own.

  • Often, CRE loans are made to a business entity such as a corporation, developer or trust, though an individual can borrow one as well. Most of these loans require that the property is owner-occupied, meaning your business resides in at least 51% of the building.

CRE loans work similarly to personal mortgages. They are structured as term loans to be repaid over a set period of time, with interest, and are usually secured by the property being financed.

Currently rates range from 3% to 20%, depending on the exact type of loan, property and your personal financial profile. The repayment term may also be shorter for CRE loans, meaning they can be a bit more expensive than residential loans.

Similarly to residential mortgages, CRE loans come with closing costs. 

Owner-occupied commercial real estate loans

  • Owner-occupied CRE simply refers to commercial space that's occupied and used by the owner of the property, as opposed to being leased to other tenants.

Investment property commercial real estate loans

Commercial real estate loans for investment properties are loans specifically designed for businesses that don't intend to occupy the property they are purchasing. Instead, the property will be leased to commercial or residential clients to provide rental income to the business.

Commercial construction loans

  • Commercial construction loans are commercial real estate loans that are specifically designed for new construction or renovation of existing properties. 
  • These loans can be applied to finance construction for owner use or for companies that are contracted to build properties for other companies. They are usually structured under a draw schedule where instead of receiving the full loan amount upfront, you receive disbursements as certain milestones of the project are completed.

Speculative construction loans

Speculative construction loans are a type of commercial construction loan that involve financing new construction, such as homes or commercial spaces, without having upfront buyers or tenants.