Deal at a Glance
| Loan Amount | $9,034,000 |
| Property | Owner-occupied commercial property |
| Location | Burbank, California |
| Transaction | Refinance |
| Lender | a regional bank |
| Rate | 3.90% fixed for the full loan term |
| Amortization | 25 years |
| Term | 10 years |
| Maximum LTV | 75% of as-is appraised value |
| Minimum DCR | 1.25x Global DCR |
| Prepayment Penalty | 5%/4%/3%/2%/1% (years 1-5) |
| Guaranty | Full recourse from 4 individual guarantors |
| Banking Relationship | Required within 90 days of closing, or rate/floor increase 1.00 point |
| Advance Deposit | $8,000 (incl. $750 documentation fee) |
| Collateral | First trust deed on the property |
| Closed | Q1/Q2 2022 |
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 multi-guarantor ownership group refinancing an owner-occupied commercial property in Burbank, CA. The ownership wanted a long-duration fixed rate with meaningful proceeds, and structuring a deal that satisfied a full recourse guaranty across four separate individuals took real coordination with the bank's underwriting team. Commercial Lending Solutions specializes in owner-occupied commercial refinancing and permanent bank financing for multi-guarantor ownership groups across California and nationwide.
Burbank's commercial corridors serve a mix of media, entertainment-adjacent, and general commercial tenants, and a bank comfortable underwriting a genuine owner-occupied structure with multiple full-recourse guarantors, rather than requiring a single dominant sponsor, was the right fit for this ownership's structure.
What Made It Hard
- Coordinating full recourse guaranties across four individuals. With four separate guarantors each providing full recourse, rather than a single sponsor or a capped guaranty split, the underwriting had to account for each guarantor's independent financial picture rather than relying on one dominant credit.
- A banking relationship covenant with a real rate penalty. The bank required the borrower's entire deposit relationship, checking, savings, operating, payroll, and merchant accounts, to move to the bank within 90 days of closing, with an automatic 1.00 percentage point rate increase if that condition wasn't met.
- A minimum appraised value well above the loan amount. The bank's proposal specified a minimum appraised value of $12,000,000 based on its own ordered appraisal, meaning the deal's leverage and proceeds depended entirely on that valuation coming in as expected.
"Four full recourse guarantors means four independent underwriting files running at once. The part that actually protected this closing date was making sure every guarantor understood the banking relationship covenant upfront, so a 1 point rate increase never became a surprise three months after closing."
How We Ran the Process
Trevor Damyan, a California-licensed real estate broker (CA DRE 02244836), placed the refinance with a regional bank, with the signed letter of interest dated February 18, 2022:
- $9,034,000 secured by a first trust deed on the Burbank property, structured as an owner-occupied commercial real estate loan
- 3.90% fixed for the full loan term, with monthly principal and interest payments on a 25-year amortization schedule and a 10-year maturity
- A maximum 75% loan-to-value based on the bank's own ordered appraisal, with a minimum required property value of $12,000,000
- A minimum 1.25x Global Debt Coverage Ratio, as determined by the bank, with no secondary financing permitted against the collateral
- A declining prepayment penalty of 5% in year one, 4% in year two, 3% in year three, 2% in year four, and 1% in year five
- Full recourse personal guaranties from four individual guarantors, each with more than 10% ownership interest in the borrowing entity
- A full banking relationship requirement: the borrower had to establish its entire deposit relationship, checking, savings, operating, payroll, tax, and merchant accounts, with the bank within 90 days of closing, or the interest rate and rate floor would immediately increase by 1.000 percentage point
- An $8,000 non-refundable advance deposit, inclusive of a $750 loan documentation fee, applied against appraisal, appraisal review, environmental report, and survey costs
- A required assignment of an existing commercial lease on the property, plus mandatory use of the bank's affiliated escrow division for all settlement services
- A 60-day lender exclusivity period from the letter's date, during which the borrower could not simultaneously process a similar loan request with another lender
The refinance closed with all four guarantors executing full recourse guaranties and the borrower committed to consolidating its banking relationship with the bank, giving the ownership group a decade of fixed-rate certainty on the property.
Why We Won This One
Managing four separate full-recourse guarantor relationships through underwriting, rather than treating the deal as a single-sponsor transaction, is what kept this closing on schedule. Each guarantor needed independent financial documentation and background review, and coordinating that process across four parties simultaneously avoided the kind of sequential delays that can stall a multi-guarantor deal.
Getting the ownership group aligned early on the banking relationship requirement also mattered. A covenant that penalizes the rate for not moving deposit accounts within 90 days is a real operational commitment, not a formality, and making sure the borrower understood and planned for that requirement before closing avoided a rate increase landing as a surprise three months later.
Is This Structure Right for Your Deal?
If you're refinancing an owner-occupied property with multiple ownership partners and can support a full banking relationship with your lender, a bank offering a decade of fixed-rate certainty in exchange for that relationship can be a strong fit. We arrange owner-occupied commercial loans 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.
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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