In many markets, yes. Office properties often face more conservative underwriting due to shifting demand and higher vacancy risk. Strong tenancy, stable cash flow, and experienced ownership can help offset this risk. In recent years, offices have seen a mixed response from the capital markets (largely negative, but recent bounce back) due to initial blowback from COVID.
Yes. Medical office buildings are viewed differently. They are sometimes seen more favorably due to specialized tenant demand and longer lease terms. As a result, they may qualify for higher leverage and more competitive loan terms. On the other hand, if the property/tenant does not perform, the tenant improvement/rehab capital required to convert it to a different space can be very intensive.
Often, yes. Lenders may require reserves for future tenant improvements and leasing commissions, especially when leases are nearing expiration or the property is in a competitive leasing market.
Office loan closings typically take 60 to 90 days, depending on property complexity, lease reviews, and due diligence requirements.
Most office loans require 25% to 35% down, depending on occupancy, lease terms, and market conditions. Higher vacancy or near-term lease rollover may require additional equity.
