Why would a lender include a specified-tenant sweep provision on a single-tenant retail loan?

When one tenant supports essentially all of a property's income, a lender protects itself by requiring excess cash to be swept into a reserve if that tenant goes dark, gives notice to vacate, or its lease nears expiration, rather than waiting for an outright default. This loan named its anchor tenant a Specified Tenant and triggered a cash sweep on any of those warning signs.

How is the interest rate set on a floating-to-floor CMBS conduit loan?

Some conduit loans price at the greater of a floating index plus a fixed spread or a stated minimum rate, protecting the lender's yield if benchmark rates fall while still tracking the market if rates rise. This loan priced at the greater of the 10-year Treasury or 10-year swap rate plus 245 basis points, or a 3.70% floor.

What does a 60% loan-to-cost cap mean for an acquisition loan?

Capping the loan at 60% of the actual purchase price and closing costs means the buyer must fund the remaining 40% or more in cash, giving the lender a substantial equity cushion against the property's value. This loan capped proceeds at 60% of loan-to-value, loan-to-cost, and loan-to-purchase-price simultaneously.

Why does a conduit lender require a Good Faith Deposit before ordering third-party reports?

A Good Faith Deposit covers the lender's due diligence costs, including appraisal, environmental, and legal fees, and is credited back to the borrower at closing if actual costs come in lower. This loan required a $25,000 Good Faith Deposit, including a $10,000 processing fee waived at closing.

Case Study: $4.3M Net-Lease Retail Acquisition Loan in Murrieta, CA

Deal at a Glance

Loan Amount	$4,300,000
Property	34,442 sq. ft. net-leased retail complex, anchored by a national outdoor-goods retailer
Location	Murrieta, California
Transaction	Acquisition
Lender	a national CMBS conduit lender
Rate	Greater of (10-year Treasury or 10-year swap rate) + 245 bps, or 3.70% floor
Term / Amortization	10 years / 30 years
Max LTV / LTC / LTPP	60% (all three simultaneously)
Minimum DSCR	1.40x
Minimum Debt Yield	9.00%
Recourse	Non-recourse with standard carveouts
Prepayment	Yield maintenance until securitization, then 2-year lockout, defeasance thereafter
Good Faith Deposit	$25,000, including $10,000 processing fee waived at closing
Closed	Q4 2021 / Q1 2022

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 private investor acquiring a single-tenant retail complex in Murrieta, California, in the Southwest Riverside County submarket. The property, a 34,442-square-foot retail building anchored by a national outdoor-goods retailer, offered the kind of predictable, credit-tenant income that CMBS conduit lenders compete hardest to finance, and our job was to get this acquisition to a conduit lender on terms that worked against a real closing timeline.

Financing a single-tenant retail acquisition through a CMBS conduit lender means underwriting the tenant's credit and lease terms as much as the real estate itself, and building that story clearly is what let this loan move through diligence on schedule. Commercial Lending Solutions specializes in CMBS conduit financing and net-lease retail acquisitions for investors across California.

What Made It Hard

A floating-to-floor rate structure. Pricing at the greater of a floating index plus spread or a fixed floor meant the ultimate rate wasn't locked until closer to closing, requiring the buyer to underwrite the deal against a moving target.
Tenant-concentration risk built into the loan documents. With the anchor tenant designated a Specified Tenant, the loan carried cash sweep triggers tied to that tenant going dark, vacating, or approaching lease expiration, requiring the buyer to accept ongoing performance monitoring rather than a simple closing-day underwrite.
A hard 60-day closing window. With the term sheet requiring the loan to close within 60 days or automatically expire, and a 90-day exclusivity period running in parallel, the acquisition had to move through third-party reports, title, and loan documentation on a compressed schedule.

How We Ran the Process

Trevor Damyan, a California-licensed real estate broker (CA DRE 02244836), placed the acquisition loan with a national CMBS conduit lender, working the deal through as a CMBS conduit execution:

$4,300,000, capped at 60% of loan-to-value, loan-to-cost, and loan-to-purchase-price simultaneously
Pricing at the greater of the 10-year Treasury rate or 10-year swap rate plus 245 basis points, or a 3.70% floor, accruing on a 360-day year
A 10-year term with a 30-year amortization schedule
A minimum 1.40x debt service coverage ratio and a minimum 9.00% debt yield, both tested at closing
Non-recourse financing with standard carveouts, with a warm-body guarantor required for the customary recourse exceptions
Yield maintenance prepayment until securitization, followed by a 2-year post-securitization lockout, defeasance thereafter, and an open prepayment window in the final 3 months of the term
Upfront and ongoing reserves, including approximately $1.00 per square foot annually for leasing costs and $0.15 per square foot annually for replacement reserves
A $25,000 Good Faith Deposit, including a $10,000 processing fee waived upon closing, with third-party diligence costs capped at $25,000 excluding title, survey, and servicer setup fees

The acquisition closed within the term sheet's 60-day window, with the buyer taking title to the anchor-tenanted complex backed by a conduit loan structured around the tenant's lease strength.

"A conduit lender will move fast on a real closing timeline if you hand them the tenant credit story up front instead of letting them find the Specified Tenant language on their own halfway through diligence."
, Trevor Damyan, Commercial Lending Solutions

Why We Won This One

Getting a conduit lender to move on a single-tenant retail acquisition inside a hard 60-day window came down to presenting the tenant's credit story cleanly from the outset, rather than treating the underwriting as a generic real estate file. Building the Specified Tenant provisions into the buyer's expectations early, instead of surfacing them as a surprise late in diligence, kept the deal from stalling once the loan documents came back.

Locking in the loan-to-cost, loan-to-value, and loan-to-purchase-price caps together, rather than relying on just one metric, also gave the buyer clarity on proceeds early enough to size their equity check with confidence going into closing.

Is This Structure Right for Your Deal?

If you're acquiring a single-tenant net-leased property and want conduit-level pricing on a real closing timeline, we can help you build the underwriting story a CMBS lender needs to move quickly. We arrange permanent loans and bridge 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 acquisition.

Trevor Damyan

Commercial Mortgage Broker, Commercial Lending Solutions | CA DRE 02244836

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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