Long term tenancies to a single tenant are not as common as they once were.
As the demand for flexible working space increases, combined with paradigm shifts in how we work and shop, commercial tenancies are drastically different to what they were even 5 years ago.
Most mainstream lenders still require the majority of rental income to extend past their mortgage term. If you have a tenant with anything less than 5 years remaining on their tenancy, then this will mean they can’t lend.
Fortunately, we have plenty of experience in assisting our clients obtain finance when there are multiple and short-length tenancies.
Why choose PFG for your Multi-Tenant Commercial Mortgages?
We have seen most scenarios when it comes to Commercial Mortgages; from serviced offices with tenants on monthly rolling contracts, to mixed use schemes that incorporate retail space, offices, buy-to-let and yoga studios all in the same building.
The key to getting a loan is for us to understand the risk to the lender, so we can counter the objections and de-risk the proposition accordingly;
- We need to know about the client; their background and experience in managing such assets.
- The asset itself; what are the alternate uses? Can the space be adapted to suit new tenants? Is the cashflow there to support the increased turnover in tenants?
- The wider picture; what is the demand and supply for this space in the local area? How is society changing and how will that impact on the tenants and the sector?
Whilst lenders are realising that a single tenant on a 10+ year lease is less and less common, change is slow, so assets with multiple incomes are tricky to place. We understand the challenges and will take the time to understand your unique requirements.
