Deal at a Glance
| Loan Amount | $1,800,000 |
| Appraised Value | $5,500,000 |
| Loan-to-Value | 33% |
| Property | Commercial property |
| Location | Canoga Park, California |
| Lender | Symetra Life Insurance Company / First Symetra National Life Insurance Company of New York |
| Rate | 2.15% over the 10-year U.S. Treasury yield, floored at 2.84% |
| Term / Amortization | 25 years (five 5-year rate periods) / 25 years |
| Financial Covenants | Minimum NOI, occupancy, property value, and net worth/liquidity covenants all waived |
| Prepayment | Greater of 1% of balance or Treasury-based yield maintenance; waived in final 90 days |
| Guaranty | Personal guaranty covering standard bad-acts carveouts |
| Good Faith Deposit | 1% of loan amount ($18,000) |
| Closed | Q3/Q4 2021 |
The Deal That Walked in the Door
We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this deal brought us a borrower looking to place a low-leverage loan against a commercial property in Canoga Park, California, in the San Fernando Valley. With substantial equity already in the property, the goal wasn't maximizing proceeds, it was finding a lender willing to trade low leverage for a covenant-light structure and long-term rate stability.
Life insurance lenders compete hardest for exactly this profile: strong collateral coverage with minimal ongoing performance risk, and building the underwriting package to highlight that low-leverage story is what got this deal in front of the right lender.
Commercial Lending Solutions specializes in permanent loans and life insurance company placements for owners of commercial property across Los Angeles, CA and the broader Southern California market.
What Made It Hard
- Structuring a rolling five-year rate reset over a 25-year term. Rather than a single locked rate, the loan carried five separate 5-year rate periods, each subject to repricing at the lender's then-current market rate, requiring the borrower to accept periodic rate uncertainty in exchange for a long overall amortization schedule.
- Negotiating covenant waivers on a life insurance platform. Life insurance lenders don't waive minimum NOI, occupancy, and net worth covenants by default, and getting all of them waived required demonstrating that the loan's low leverage made those tests unnecessary.
- A yield-maintenance-or-percentage prepayment structure. With prepayment charged at the greater of 1% of the balance or a Treasury-based yield maintenance calculation, the borrower had to plan any future refinance or sale around a prepayment cost that wasn't fixed in advance.
How We Ran the Process
Trevor Damyan, a California-licensed real estate broker (CA DRE #02244836), placed this loan with Symetra Life Insurance Company and First Symetra National Life Insurance Company of New York, with the loan application dated August 6, 2021:
- $1,800,000 against a $5,500,000 appraised value, a 33% loan-to-value ratio
- 2.15% over the 10-year U.S. Treasury yield, floored at 2.84%, with five separate 5-year fixed rate periods across a 25-year term and 25-year amortization
- Rate resets at the start of months 61, 121, 181, and 241, tied to the lender's then-current rate for new 5-year loans of similar size and quality, never below the original note rate
- All standard financial covenants waived, including minimum NOI, occupancy, property value, and borrower/guarantor net worth and liquidity tests
- A prepayment charge equal to the greater of 1% of the outstanding balance or a Treasury-based yield maintenance calculation, waived during the final 90 days of the term and around insurance or condemnation proceeds
- A personal guaranty covering standard carveout events including misapplied insurance or condemnation proceeds, waste, unpaid taxes and liens, and fraud or misrepresentation
- A Good Faith Deposit equal to 1% of the loan amount ($18,000), refundable at closing, plus a $4,000 processing fee deducted from that deposit
The loan closed with the borrower locked into a stable, long-dated amortization schedule and a covenant-free structure, trading lower leverage for meaningfully less ongoing lender oversight than a higher-leverage loan would have carried.
"On a deal this low-leverage, the collateral does the talking. Once Symetra saw the equity cushion, waiving the covenants wasn't a hard sell, it was just math."
Why We Won This One
Getting Symetra comfortable waiving every financial covenant on this loan came down to leading with the collateral math: a 33% loan-to-value ratio gave the lender such a large equity cushion that ongoing NOI, occupancy, and net worth tests added little practical protection. Presenting that case clearly upfront, rather than negotiating covenants one at a time during underwriting, is what got the full waiver package approved.
Accepting the rolling five-year rate reset structure, rather than holding out for a single locked rate over the full 25-year term, is what let the borrower access life insurance company pricing and a long overall amortization schedule that a bank alternative likely wouldn't have matched at this leverage.
Is This Structure Right for Your Deal?
If you have substantial equity in a commercial property and want a covenant-light loan rather than maximizing proceeds, a low-leverage life insurance execution can deliver real long-term stability. We arrange permanent loans and owner-occupied commercial 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 loan.
This is one of 32 closings we have arranged in Los Angeles County. Read about how we work as a Los Angeles commercial mortgage broker, see our Los Angeles commercial mortgage loans, or browse all 46 California closed deals.
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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