Industrial

Standard Financing

Properties that generate consistent cash flow through arms-length leases are favourable candidates for standard financing. For industrial assets, this can mean properties that have leases greater than five years as well as properties that have multiple units leased to multiple arms-length tenants. Owner-occupied assets can be considered, however, historic financial performance will be reviewed and scrutinized. Specialized industrial assets also introduce financing challenges. The risk is greater in the case of specialization as it is harder to devise contingency plans and find replacement tenants if required.

Standard financing offers a term of five years or more, a fixed interest rate and is typically closed to prepayment for the term’s duration. For industrial, conventional is the most common type of standard financing.

Standard financing is usually considered when borrowers want the payment predictability that comes with a fixed interest rate. However, it is important to note that a typical conventional financing term for an industrial asset is five years. Longer terms are available, but there is often greater scrutiny on future cash flows. Borrowers must be able to show that longer-term leases (i.e. maturing in 10 years or more) are in place for the duration of the mortgage term.

Commercial Mortgage Backed Securities (CMBS): CMBS is a conventional financing solution available for first mortgages on established, stabilized properties (generally three or more years of stable operating history). This type of financing works well for properties with in-place, stabilized net cash flow.

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Economic and political developments – both in Canada and globally – can impact the commercial real estate market. First National experts follow these trends closely and provide honest, real and professional perspectives into what they could mean for your portfolio.

Smart risk solutions in action for industrial

See how we’ve applied our financing products innovatively to help industrial borrowers achieve their goals with performance and value.

Refinance of an industrial building

$21.6 Million
1 unit
Longueuil, Quebec

Conventional Mortgage
7 years term, 25 years amortization
LTV: 63.28%

Loan proceeds shall repay existing debt with the remaining to be used as an equity takeout to complete capital improvements at the property

$16.5 Million
126,324 sq. ft.
Vancouver, British Columbia

Industrial - Equity Take-out
5 years term, 25 years amortization
LTV: 55.29%

To facilitate the purchase of industrial and industrial/flex properties in the Ottawa area

$85 Million
692,631 sq. ft.
Ottawa, Ontario

Industrial purchase
5 years term, interest only amortization
LTV: 93%

New conventional first mortgage to place term debt on the subject property facilitate the purchase of the property

$37.2 Million
156,865 sq. ft.
Abbotsford, British Columbia

Loan financing first mortgage loan
3 years term, Interest only amortization
LTV: 64.4%

Refinancing existing loan on industrial space with office and showroom

$3 million
18,500 sq ft
Vaughan, Ontario

Conventional refinancing
5 years term, 25 years amortization
LTV: 67%

Loan used to refinance two industrial buildings and to withdraw equity

$12 million
170,890 sq. ft.
Laval, Quebec

Conventional refinance first mortgage
2 years term, 25 years amortization
LTV: 75%

Conventional first mortgage loan used to assist in the purchase of the industrial property

$10 million
65,821 Sq. ft.
Waterloo, Ontario

Conventional First Mortgage
5 years term, 25 years amortization
LTV: 63%

A new conventional first mortgage to recapture the amount spent on the purchase of the property and equity take-out

$3 million
29,032 sq. ft.
Vaughan, Ontario

Conventional first mortgage
5 years term, 25 years amortization
LTV: 59%

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Latest resources and insights

Original perspectives and personal viewpoints on developments and industry trends in commercial real estate.

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View other industrial mortgage solutions

Bridge financing

First National’s bridge loan terms usually range from three months to three years, include floating interest rates and allow some form of early prepayment. Borrowers choose this solution until standard financing is secured or while they contemplate a property sale, a change in ownership structure or complete operational improvements.

Asset repositioning

First National enables owners to access a property’s equity for a short term, typically two years or less, to fund capital improvements or repairs without the need to raise capital from personal sources or less flexible, higher-cost alternatives.

Secondary financing

A First National second mortgage enables borrowers to access the equity in a property and use it to purchase another asset or renovate/repair their existing property.

Development / Construction

A First National construction loan provides funds to cover the cost of building or rehabilitating a property with terms typically of three years or less.

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