The Deal
Commercial Lending Solutions arranged a $19M permanent loan for a multi-tenant industrial park in City of Industry, CA. The property was well-positioned within an established industrial submarket with strong logistics demand, direct highway access, and adequate truck court depth and clear heights for modern distribution use. The occupancy profile consisted of established logistics and light-manufacturing tenants with staggered lease expirations, producing in-place NOI well above debt service requirements at the requested loan amount. The borrower was executing a cash-out refinance to recycle equity into additional industrial acquisitions.
The Challenge
Industrial cap rates had compressed significantly over the prior cycle, pushing values well above the borrower's original acquisition basis. While this created substantial equity to recycle, it also meant that loan proceeds at current values and standard LTV ratios produced a meaningful equity extraction. Some lenders had begun applying conservatism to higher-loan-amount industrial deals, requiring lower LTV or shorter terms as industrial values reached historic peaks. The borrower needed a lender confident enough in the submarket's industrial fundamentals to underwrite at current appraised values without a meaningful valuation discount.
The Solution
Trevor Damyan at Commercial Lending Solutions identified a life insurance company lender with a large active industrial portfolio and conviction in the submarket's long-term logistics demand fundamentals. The loan was structured at 60% LTV based on the current appraised value, with a 10-year fixed rate and 30-year amortization. The lender's own industrial market research supported the appraised value, and the in-place NOI produced DSCR comfortably above its minimum threshold, supporting full loan amount approval without adjustment. The rate reflected the high quality of industrial collateral relative to other commercial property types in the lender's portfolio.
The Outcome
The cash-out refinance closed within 45 days, producing equity proceeds that were immediately committed to a new industrial acquisition in a complementary submarket. The 10-year fixed rate locked in institutional financing through the borrower's planned hold period, eliminating refinancing and rate risk for a decade. The 30-year amortization maintained strong DSCR throughout the loan term, and the in-place lease staggering reduced rollover concentration in any single year. The borrower expanded the industrial portfolio by two additional assets within 12 months using the recycled equity, compounding the portfolio's exposure to the high-performing industrial asset class at favorable cost of capital.