Shopping center investors have been turning to Winston Rowe & Associates, a national No Advance Fee commercial real estate due diligence and advisory firm.

They have prepared this article to provide general information concerning commercial real estate financing options for owners and operators of shopping centers.

Winston Rowe & Associates always welcomes the opportunity to speak with clients directly. They can be contacted at 248-246-2243 or visit them on line at


Shopping centers are distinctly different from downtown and local business strips. The shopping center development is pre-planned as a merchandising unit for interplay among tenants.

Its site is deliberately selected by the developer for easy access to pull customers from a trade area. It has on-site parking as a common feature of the layout.

Customers like the shopping center's convenience. They drive in, park and walk to their destination in relative safety and speed.

Some shopping centers provide weather protection, and most provide an atmosphere created for shopping comfort. For the customer, the shopping center has great appeal.

Qualifying for Financing:

Your financial backing and merchandising experience may be unproven to the lender. Your challenge is convincing the lender that the shopping center has a reasonable chance of success and will help the tenant mix.

To finance a center, the lender prefers leases from major companies with strong credit ratings, the tenant rosters that include the triple-A ratings of national chains.

However, lenders also like shopping centers with local merchants with good business records and proven understanding of the market have a good chance of being considered by a shopping center lender.

Structuring the Transaction:

There will be due diligence by the lender this will include a global approach, which means the lender will review and verify both personal and business financials and background of all of the investors
(owners) within the transaction. Furthermore during the due diligence phase of the transaction, the lender will place a very strong emphasis on the exit strategy, especially if your seeking short term bridge financing.

They will verify that the tenant leases are valid and that tenants have strong business financials. If your tenants are not major retailers, the lender may also want to review the credit and personal financials of the current or future tenants.

It’s very important, that you understand that lenders are very risk adverse and underwrite for worst case scenario.

Down Payment & Skin in the Game:

Many first shopping center investors make the mistake of thinking their equity into the deal is the appraised value, not the sales price or a large seller second position note.

Lenders will require the investor to have skin in the game (cash). For a 100% occupied A+ property your down payment will be at 20%. For distressed shopping centers, the investor will need up to a 40% down payment.

As a general rule of thumb, if you’re purchasing or refinancing a shopping center, the lender will have certain loan to value (LTV) requirements, 80% LTV for a purchase and 60% LTV for a refinance.

Supporting Documentation:

You need to be prepared to provide supporting documentation to an underwriter or a firm that performs the initial due diligence investigation.

Even if you’re asking for a non recourse loan, you will still need to provide personal financials, credit reports, identification and a background check, some of which is required pursuant to the USA Patriot Act.

Commercial real estate investors who are reluctant or refuse to provide any level of personal information are quickly rejected by the lenders and asked not to reapply.

The ensuing is a list of supporting documents that may be required to process and underwrite your commercial loan request, additional documents may be required.

Financial Supporting Documents:

The last three (3) years corporate tax returns

The last three (3) years business tax returns

Name and address of corporate bank

Business Profit & Loss 3 Years, For Seller or Buyer

Most recent copy of business bank statement

Personal financial statement for all guarantors

Detailed use of proceeds

Property Supporting Documents:

Schedule of tenants leases

Copies of tenant leases

Schedule of units with square foot per unit

Schedule of improvements to be made with cost breakdown to subject property

Exterior photos

Interior photos

Most recent appraisal

Copy of the first page of the insurance binder

Guarantor Supporting Documents:

4506 T executed

Tri merge credit report

Government issued photo ID copy – front and back

Articles of Incorporation

Winston Rowe & Associates provides expert non investment due diligence, advisory and consulting services in the following states for commercial real estate financing.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

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