# Industrial Lender Criteria

> **What this is:** A U.S.-focused reference on common lender fit for industrial acquisitions, refinancings, and transitional executions.
> **How to use it:** Load this with the industrial financing-fit, underwriting, or IC memo skills. Use it to decide which lender category is most plausible for the subject deal before you start comparing quotes.

Industrial debt is not one market. The correct lender depends on lease durability, building quality, market liquidity, loan size, sponsor profile, and the borrower's need for flexibility.

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## Core Lender Categories

| Lender Type | Best Fit | Typical Strength | Typical Limitation |
|---|---|---|---|
| Bank | Relationship-driven, smaller-balance, recourse-friendly, local-market deals | Speed, flexibility, local knowledge | Often more recourse and lower leverage than aggressive bridge |
| Life Company | Institutional-quality, stabilized industrial with durable cash flow | Low-cost permanent debt, strong execution for high-quality assets | Selective on sponsorship, quality, and rollover profile |
| CMBS | Larger, durable cash-flow assets with sufficient term and documentation quality | Competitive fixed-rate execution for the right asset | Less flexibility, more process, heavier defeasance / servicing considerations |
| Bridge / Debt Fund / Alternative Lender | Lease-up, release, spec upgrade, repositioning, transitional business plans | Structure flexibility, future funding, transitional underwriting | Higher coupon and tighter downside controls |
| SBA 504 | Owner-user industrial where the operating company occupies the real estate | Long amortization and attractive owner-user execution | Not available for passive investment rental real estate |

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## What Lenders Usually Care About

Across lender types, screen for:

- stabilization level
- occupancy
- WALT
- tenant quality
- rollover schedule
- market depth
- building competitiveness
- sponsor strength
- requested leverage

Industrial underwriting warning:

- A strong building with weak lease durability can lose permanent-loan fit.
- A weaker building in a strong market may still need bridge execution if the business plan depends on capital work or re-leasing.

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## Bank Fit

Best fit:

- smaller or mid-sized industrial deals
- relationship banking scenarios
- borrowers comfortable with recourse or partial recourse
- local-market or regional assets where bank knowledge matters

Bank strengths:

- flexible structure
- construction or mini-perm options
- local sponsor support

Common bank cautions:

- sensitivity to sponsor relationship and deposits
- tighter proceeds when rollover or obsolescence risk is visible
- reduced appetite for highly specialized or weak secondary-market assets

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## Life Company Fit

Best fit:

- larger, high-quality stabilized industrial
- strong markets
- durable WALT and better tenant quality
- borrowers prioritizing low-cost permanent debt

Life company signals from current market materials:

- industrial is an active target property type
- fixed, floating, transitional, mezzanine, and construction products may all exist, but the strongest fit remains durable institutional-quality assets

Common life company cautions:

- selective sponsor and asset filtering
- lower enthusiasm for weak rollover, specialized buildings, or thin markets
- sizing expectations may exclude smaller deals

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## CMBS Fit

Best fit:

- larger loans
- durable rent rolls
- assets with strong documentation and bond-buyer appeal
- situations where fixed-rate execution matters more than structure flexibility

CMBS strengths:

- scalable execution
- ability to finance larger stabilized assets
- useful option for strong single-tenant or larger multi-tenant industrial when term is sufficient

Common CMBS cautions:

- less borrower flexibility
- servicing rigidity
- lower tolerance for ambiguous rollover or complex business plans

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## Bridge / Debt Fund Fit

Best fit:

- lease-up
- transitional occupancy
- re-tenanting
- repositioning
- functional or competitive upgrades
- assets needing future funding or structural flexibility

Bridge strengths:

- business-plan lending
- ability to fund future CapEx or TI / LC
- tolerance for transitional cash flow

Common cautions:

- higher coupon
- tighter covenants or structure
- refinance risk at maturity

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## SBA 504 Edge Case

Use only when:

- the borrowing business will occupy the property
- the transaction satisfies SBA program rules

Do not route standard investor-owned industrial acquisitions into SBA logic.

The 504 program is useful as a carve-out note in the financing skill so owner-user users are not forced into investor-debt assumptions.

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## Practical Financing Screens

### Strong Permanent Debt Candidate

- durable WALT
- credible tenant quality
- limited near-term rollover
- competitive building specs
- liquid market

### Likely Transitional Candidate

- meaningful rollover inside hold period
- occupancy or lease-up risk
- major CapEx or spec-upgrade need
- specialized space requiring active release assumptions

### Likely Relationship-Bank Candidate

- smaller balance
- local sponsor
- recourse acceptable
- business-plan flexibility more important than bond-style pricing

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## Industrial Financing Red Flags

- short WALT with optimistic permanent-debt assumption
- thin-market or specialized asset treated like a commodity warehouse
- aggressive leverage on a release-driven thesis
- confusing investor-owned real estate with owner-user SBA eligibility

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## Last Updated

Last updated: 2026-04-22

## Scope Limitations

- U.S. only
- Screening guidance, not lender commitment terms
- Time-sensitive spreads, leverage, and proceeds vary with market conditions

Validate current local market conditions and live lender feedback before relying on any capital-markets assumption.
