Warehouse loans are a type of commercial real estate financing designed for properties used primarily for storage, distribution, or logistics operations. These loans support the acquisition, development, or renovation of warehouse properties. Here’s an overview of warehouse loans:
1. Loan Purpose: Warehouse loans are used for various purposes related to warehouse properties, including:
- Acquisition Loans: Financing the purchase of existing warehouse facilities.
- Construction Loans: Funding the development or construction of new warehouse properties.
- Refinancing Loans: Replacing existing debt on warehouse properties with more favorable terms.
2. Loan Amounts: Typical loan amounts for warehouse loans can vary widely, depending on factors like the size of the property, location, and the borrower’s financial qualifications:
- Small to Mid-Sized Warehouses: Loans for smaller or mid-sized warehouses may range from $1 million to $10 million or more.
- Large Warehouse Complexes: Financing for larger warehouse complexes, especially in logistics hubs, can exceed $10 million and go into the tens of millions or more.
3. Loan Terms: The terms for warehouse loans are flexible and can be customized to suit the specific project requirements and borrower needs. Typically, loan terms range from:
- Intermediate-Term: These loans may have terms of three to seven years and are suitable for smaller warehouse properties or construction projects.
- Long-Term: Long-term loans can have terms ranging from seven to 25 years and are used for larger warehouse complexes or refinancing existing debt.
4. Collateral and Personal Guarantees: Lenders often require the warehouse property itself as collateral, and personal guarantees from the borrower may be necessary.
5. Interest Rates: Interest rates for warehouse loans can vary based on the lender’s policies and the specifics of the loan agreement. Rates may be fixed or variable.
Warehouse loans are essential for real estate investors and logistics businesses seeking to acquire, develop, or manage warehouse properties for storage and distribution purposes. The loan terms and amounts will be tailored to the specific property’s size, location, and financial characteristics. To explore warehouse property financing and determine the most suitable loan for your needs, please contact Obelisco Advisers experts for personalized guidance and support.