Single Tenant Medical Building, no tenant financials
Quick questions. Working to acquire a single tenant medical building, in a really nice town, newish construction (2015), great location. But the tenant has no obligation to show any financials information, was missed in first lease. 9 years remaining on lease. Assuming we do not get their tenant financials, do you all have any advice on how to evaluate the strength of the tenant in other ways?
[{"id": "glqnxwp", "text": "The guy who said no bank would ever finance you is wrong. If your own financial statements are stable enough they will just take the personal guarantee, likely with a more conservative DSCR requirement and possibly a liquidity threshold requirement. If your cash flow isn't strong, then he is right, but in this environment it probably wouldn't matter if the tenant showed golden financials, the regulators have a lot of lenders scared shitless of making a bad loan. If you can demonstrate consistent tenant payments over 5 years without any issues your chances are not awful, but medical does tend to get a little more scrutiny. This also all depends on what market; great location in Little Rock Arkansas is way different than great location in Houston. Source: I have written 7 loans for STNL deals in the last 3 months (lender's counsel) and have sold STNL on low caps with no financials when I still brokered.", "replies": [], "depth": 1}, {"id": "glqogwq", "text": "Other ways to evaluate the tenant\u2019s strength:\n\nExistence of personal guarantees\n\nTalking to the tenant\n\nTalking to the tenant\u2019s competitors to see if they have insight on their business \n\nObserving their patient traffic \n\nunderstanding their business model and its prospects for the future \n\nlooking at past rental history\n\nis the entity on the lease a single purpose entity just for this location or is it a corporate guaranty from a much larger entity", "replies": [{"id": "glspp5e", "text": "Great advice", "replies": [], "depth": 2}], "depth": 1}, {"id": "glqqwuu", "text": "**Mod here (who has financed $200MM in this product type without tenant financials:** Deleting all inaccurate, broad strokes comments from brokers about \u201cno bank would ever finance you\u201d. This is categorically untrue. Anyone responding to this post in a vulgar, offensive way will be permanently banned from this community", "replies": [], "depth": 1}]