Financing Criteria / Lending Strategy
In principle, the following financing criteria apply for commercial real estate financing:
- Completed properties with stabilised cash flow (no construction, no development) in good state of maintenance and sufficient useful remaining life
- Sustainable property income as a result of (i) a good location with positive economic outlook, (ii) a good future letting prospects after the expiration of the current lease agreements and (iii) suitability for third party use of the property.
- Preferably multi-let with low lease roll-over during the term of the loan and appropriate longer-termed lease agreements with creditworthy tenants
- First-ranking financing of up to € 75 Million provided on a single property. Higher loan amounts are available by way of club deals with other partner banks or by syndication of parts of the loan upon full underwriting. For portfolio deals we have the discretionary capacity for loans of more than € 75 Million without additional financing partners
- Comfortable Debt Service Coverage (ISCR/DSCR) based on current and sustainable rental leves and appropriate operating expenses
- Loan to value (LTV) of up to 75%. Higher LTV's are possible depending on the corresponding mortgage lending value (Beleihungswert) of the property. For properties located in Germany the calculation of both the Market Value as well as the Mortgage Lending Value will be carried out by M-Wert GmbH – a fully-owned subsidiary of MünchenerHyp. For properties located outside of Germany M-Wert will calculate the Mortgage Lending Value by using the external Market Value Appraisal addressed to the bank.
- Plausible exit scenario based on conservative assumptions
- Properties to be located in economically strong regions or in locations, which support the economic strenght and the dedicated use of the property