industrial

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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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.

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%

A first mortgage bridge loan to assist with the purchase of an industrial building

  • $3 million
  • 19,910 sq. ft.
  • Ottawa, Ontario
  • Conventional bridge loan
  • 3 years term, 25 years amortization
  • LTV: 74%

Refinancing existing mortgage loans and equity takeout to retire a private mortgage

  • $3 million
  • 69,630 sq. ft.
  • Montreal, Quebec
  • Bridge loan refinance
  • 24 months, 25 years amortization
  • LTV: 61%

Purchasing property to be converted into rentable storage space

  • $3 million
  • 33,825 sq. ft.
  • Midland, Ontario
  • Conventional first mortgage
  • 3 years term, interest only amortization
  • LTV: 66%

Providing funds to refinance property and pay down its bank line

  • $10 million
  • 91,653 sq. ft.
  • Spruce Grove, Alberta
  • Conventional first mortgage
  • 3 years term, 25 years amortization
  • LTV: 75%

Providing capital to assist in real estate development

  • $3 million
  • 16,997 sq. ft.
  • Mississauga, Ontario
  • Conventional first mortgage
  • 4 years term, 25 years amortization
  • LTV: 53%

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View other industrial mortgage solutions

Short-term (bridge) Financing

Bridge financing addresses a borrower’s short-term needs, usually three months to three years.

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Repositioning / Renovating

This short-term financing option enables access to a property’s equity for improvements, renovations or repairs, eliminating the need to raise funds from personal sources.

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Secondary financing for industrial property

Second mortgages are often used to access equity in a property when a borrower wants to purchase another asset or renovate/repair a property.

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Development / Construction

Construction financing is available for condominiums, retail, office, industrial, retirement and purpose-built apartments. 

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Sign up for Market updates

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.