Boston, MA (PressExposure) October 28, 2009 -- MasterPlan Capital, a commercial mortgage lender and real estate investment banking firm, announced today the rollout of its "Credit Tenant Lease" (CTL) commercial mortgage program for CVS retail outlets.
The firms CVS financing platform will feature a long term fixed rate commercial mortgage loan that is funded by issuing private placement mortgage bonds. Loan terms will be co-terminus with the executed CVS lease to a maximum of 25 years and will be fully amortized. Interest rates will be fixed for the entire life of the loan.
A spokesperson for MasterPlan Capital LLC noted that CTL financing is very different from traditional commercial mortgage lending. CTL loans are underwritten based on the strength of a buildings tenant and the structure of the lease rather than the underlying value of the building and the credit of the borrower.
MasterPlan will offer 100% loan-to-value (LTV) mortgages against existing, stand-alone properties that are triple net leased (NNN) to CVS. The store be exclusively occupied by CVS and must have at least 10 years left on the lease.
The firm will also offer construction-to-permanent loans to developers building CVS stores from the ground up. Construction loans will be issued at up-to 100% loan-to-cost (LTC).
All loans must adhere to a debt-service-coverage ratio (DSCR) of 1.01%-1.05%.
Interest rates for the CVS program will be based on the US Treasury Bond, interpolated to correspond with the term of the loan, plus a small margin. The margin is based on the credit rating of CVS. The firm noted that while rates today are at historic lows, they will increase in the future as the economy improves and the general level of interest rates rises. MasterPlan's CVS lending platform features a rate-lock provision at acceptance of a formal loan commitment which can usually be issued within two weeks after receiving a signed application.
In a written statement MasterPlan Capital said: "The economy and credit markets continue to face challenges but our firm is committed to getting our clients the financing they need for their commercial real estate investments. We are proud to be able to expand our product offerings despite the tough times. CVS store owners who need a refinance, investors looking to purchase a CVS or developers who are building a new CVS store will be happy to know that MasterPlan has a loan for them and we can close it quickly and efficiently."