Deal at a Glance
| Loan Amount | Up to $1,280,000 |
| Property | Industrial building |
| Location | Dallas, Texas |
| Transaction | Refinance |
| Lender | a credit union |
| Rate | 5.54% fixed for 7 years, then 3-year Treasury + 2.20% at year 8 |
| Term | 120 months (10 years) |
| Amortization | Up to 300 months |
| Maximum LTV | 70% of appraised value |
| Minimum DSCR | 1.35x |
| Origination Fee | 0.65% of loan amount |
| Prepayment Penalty | None |
| Rate Lock | 45 days from term sheet execution and good-faith deposit |
| Collateral | First security interest deed of trust |
| Closed | Q2 2023 |
The Deal That Walked in the Door
We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this refinance brought us a Southern California-based ownership group looking to refinance an out-of-state industrial holding in Dallas, Texas. The ownership needed a credit union lender comfortable underwriting an out-of-state asset for California-based borrowers, at a loan size that many larger commercial lenders would consider too small to prioritize. Commercial Lending Solutions specializes in industrial refinancing and permanent loans for investors across Texas, California, and nationwide.
Dallas, TX's industrial market has drawn steady investor interest from coastal owners diversifying into Texas, and finding a credit union willing to underwrite a smaller-balance industrial refinance for an out-of-market borrower took the right kind of relationship-oriented lender rather than a conventional regional bank.
What Made It Hard
- An out-of-state asset for a California-based ownership group. The property sat in Dallas while the borrowing entity and guarantors were based in Southern California, requiring a lender comfortable underwriting across state lines without a local banking relationship already in place.
- A tight 45-day rate lock tied to appraisal timing. The quoted rate carried a hard condition: the complete loan application package had to be submitted before the lender's ordered appraisal came back, or the rate lock would void entirely, adding real time pressure to the underwriting process.
- A hybrid rate structure requiring the borrower to plan two rate periods, not one. With the loan fixed for seven years but converting to a Treasury-indexed adjustable rate in year eight of a ten-year term, the borrower needed to underwrite the deal's economics across both a known fixed period and an unknown future adjustment.
"An out-of-state industrial loan at this size gets deprioritized by most large lenders. Finding a credit union that treated it as a real relationship, not a marginal file, is what got this borrower done."
How We Ran the Process
Trevor Damyan, a California-licensed real estate broker (DRE #02244836), placed the refinance with a credit union, with the signed term sheet dated April 6, 2023:
- Up to $1,280,000 in refinance proceeds, secured by a first security interest deed of trust on the Dallas industrial property
- A 7-year fixed rate of 5.54%, as quoted on April 6, 2023, locked for 45 days from execution and receipt of good-faith funds, voided if a complete loan application wasn't submitted before the ordered appraisal was returned
- An adjustment at year eight of the 10-year (120-month) loan term, converting to the 3-year Treasury yield plus a 2.20% spread
- A maximum 70% loan-to-value, subject to a minimum 1.35x debt service coverage ratio
- Amortization of up to 300 months, with the loan allowed to be prepaid in full at any time without penalty
- A 0.65% origination fee paid to the credit union, plus borrower responsibility for all reasonable third-party expenses: title insurance, recording fees, escrow fees, survey fees, lender inspection fees, appraisal fees, and environmental assessment fees
- Annual reporting covenants: financial statements, tax returns, debt schedules, a schedule of real estate owned, liquidity statements, property operating statements, and a current rent roll from both borrower and guarantors
- A $5,000 good-faith deposit to proceed to formal credit approval, non-refundable for third-party costs incurred regardless of outcome, but credited toward closing costs if the loan was approved and accepted
The refinance closed with the full underwriting package submitted ahead of the appraisal deadline, preserving the locked rate and giving the ownership group a fixed-rate facility for the first seven years of the term.
Why We Won This One
Managing the appraisal-triggered rate lock condition is what protected this borrower's pricing. A term sheet that voids the rate lock if the loan application isn't complete before the appraisal comes back puts real pressure on document turnaround, and getting the full package, tax returns, financial statements, entity authorization documents, submitted ahead of that deadline kept the 5.54% rate intact rather than exposing the borrower to a re-quote off a moving index.
Finding a credit union willing to underwrite an out-of-state industrial asset for a California ownership group, at a loan size many larger lenders wouldn't prioritize, also mattered here. The hybrid fixed-to-adjustable structure gave the borrower seven years of rate certainty while keeping the credit union's long-term pricing risk manageable, a fit that worked for both sides of the transaction.
Is This Structure Right for Your Deal?
If you own an out-of-state industrial property and want a lender comfortable underwriting across state lines at a smaller loan size, a relationship-oriented credit union can offer terms conventional regional banks won't quote. We arrange industrial property financing and permanent loans from a network of more than 1,000 capital sources.
Apply for financing or call us at 310.708.0690 to talk through your refinance.
Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.
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