Essential Funding Solutions
for
Real Estate Investor and Small Business

September Funding

Essencap successfully closed a $5,100,000 commercial real estate refinancing loan. The subject is a 88,000-square foot, three-story, suburban office and retail building located in Glastonbury, Connecticut. The improvements were constructed in 1973, renovated in 2017 and are situated on a 4.22-acre site.

We are pleased to announce that Essencap successfully arranged a commercial real estate loan. The loan assists our client to refinance a bridge loan into a low rate stabilized real estate loan. We are honored to represent our client with this architectural gem. The building was rewarded with AIA Design Award, Honorable Mention, Connecticut Chapter.

Blog
_________

Most important ratio in
Commercial Real Estate Financing

Debt service coverage ratio, or DSCR, compares a property’s annual net operating income (NOI) to its annual debt obligation. Based on the DSCR, a lender can determine whether a project is taking in enough operating income to cover its debts. DSCR is one of the most important ratio when comes to real estate financing.

DSCR = Net Operating Income / Debt Payment.

A debt service coverage ratio of 1 means a property is generating enough income to cover the debt obligation, while DSCR of less than 1 means it is not. Hence, commercial lenders would require a property to have a DSCR higher than 1 to ensure the income is sufficiently higher than the debt payment to avoid shortfall. It’s important to realize that DSCR may change with non-cash flow item of the loan terms, such as deperication, or one time expenses.

The general requirement of commercial mortgages is a 1.25x DSCR. Please note, this number fluctuates depending on who the lender is, the property type, the submarket, amortization, and other factors.

Copyright © 2018 Essencap Funding LLC, All rights reserved.

Our mailing address is:
wecare@essencap.com

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

This email was sent to <<Email Address>>
why did I get this? unsubscribe from this list update subscription preferences
Essencap Funding LLC · 45 Middle Neck Rd Ste 220 · Great Neck, NY 11023-2124 · USA