MMR Realty Advisors

MMR Realty Advisors
3701 Maywood Court
Carrollton, TX 75007

Other Loan Types
Mobile Home Park

Eligible Properties: Anchored or unanchored single-story strip centers. Consider two-story centers, but may underwrite the second story with income limitations. Exclude special use properties and smaller buildings with limited appeal to alternative tenants. Consider free-standing stores on a case-by-case basis. Require current minimum economic occupancy of 85%. Prefer credit tenants with greater than five years remaining on the lease term.
Eligible Property Locations: Nationwide; require direct access to major roadways and high visibility. Prefer infill locations in developed neighborhoods. Unanchored centers should be located in high traffic areas. Where direct competition exists, the property is required to exhibit a stronger market appeal than the competition or a history of retaining its tenancy, sales volume and competitiveness.
Loan Size: $1 Million - $15 Million; may consider up to $25 Million.
Debt Service Coverage: 1.25 to 1.30, depending on property type.
Loan-to-Value Ratio: Up to 80% for anchored centers.
Loan Term: 7 or 10 years
Amortization: 30 years, or less, depending on major lease terms and expiration.
Tenancy: Factors for determining tenant quality include the stability of the specific business and the quality of the tenant's balance sheet. The rent roll should be reasonably diversified with staggered expirations. For multi-tenant properties, require staggered leases to avoid adverse releasing risk. Leases should be representative of the market.
Anchored/Unanchored: Allowable anchors include supermarket-drug stores, discount department stores, dry goods, retail and home improvement stores. Financially healthy national, regional or local chains are acceptable. Anchor tenant leases should have at least five years remaining on their leases as of the date of closing. Anchors should exhibit strong sales histories. Unanchored centers should have a complimentary tenant mix. Stores in unanchored centers must have strong, stable sales histories. Not more than 25% of the leases should expire in any single year.
NOI Calculation: Underwrite income using the lower of the actual rental income in place or market rent for the first year of the loan. May include recovery income, in addition to a modest level of miscellaneous income. Percentage rent and actual step-ups occurring within 12 months of closing may be factored into the revenue on a case-by-case basis. The vacancy factor will be the higher of actual or market with a minimum of 5%. A vacancy factor will be taken on all credit/anchor tenants if the lease term is less than the loan term.
Underwrite expenses using the greater of actual 12 month trailing, compared to two years historical, or the market average. Professional management fees will be calculated at a minimum of 5% of effective gross income. Reserves -$.10 to $.25 per square foot for structural reserves depending on property age and condition and adjusted in accord with the engineering report. Determine TIs/leasing commission by rollover schedule and market-based TI/leasing commission requirements.

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MMR Realty Advisors
3701 Maywood Court
Carrollton, TX 75007
Phone: 214.924.6026
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MMR Realty Advisors