$5M NNN Acquisition Houston | Commercial Lending Solutions 
Loan Size Example

$5 Million NNN Acquisition in Houston

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million NNN acquisition in Houston typically represents a well-leased, single-tenant asset with strong tenant credit and 10 to 15 year remaining lease term. These deals attract a diverse set of capital sources including national banks with dedicated STNL programs, CMBS conduits, life insurance companies, and regional credit unions competing aggressively for stabilized net lease volume. Leverage ranges from 60 to 75 percent LTV depending on tenant quality and lease longevity, with rates in the 6.5 to 7.0 percent range for institutional-grade credits. Houston's diverse industrial, retail, and office tenant base makes NNN acquisitions particularly attractive to 1031 exchange buyers seeking stable income and low management burden.

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Capital Stack

What a $5M NNN Acquisition Capital Stack Looks Like

National banks dominate the $5 million NNN space in Houston due to their appetite for investment-grade credits, flexible terms, and CMT-based pricing. Life companies and CMBS lenders compete on rate and longer amortization, while regional credit unions often emerge as secondary options or construction/bridge lenders. The lender selection typically hinges on tenant credit score, lease length, and whether the sponsor pursues non-recourse financing.

Capital Source Rate / Cost Size / LTV Notes
National bank with STNL program 6.75 to 7.25 percent $3.25 to $3.75 million (65 to 75 percent LTV) CMT-based pricing, 20 to 25 year amortization, recourse or non-recourse available at lower LTV, 30 to 45 day closing timeline
Life insurance company 6.5 to 7.0 percent $3.0 to $3.75 million (60 to 75 percent LTV) 25 to 30 year amortization, full recourse typical, longer underwriting window, appetite for investment-grade tenants
CMBS conduit lender 6.75 to 7.5 percent $2.5 to $3.75 million (50 to 75 percent LTV) Non-recourse structure, 25 to 30 year amortization, seasoning requirement post-close, 60 to 90 day timeline
Regional credit union 6.5 to 7.1 percent $1.5 to $2.5 million (30 to 50 percent LTV) Secondary financing or bridge role, relationship-driven, flexible underwriting, 15 to 20 day closing possible

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $5M NNN Acquisition Deal

The typical $5 million NNN sponsor in Houston carries $5 to $15 million net worth and has closed 3 to 8 prior NNN or stabilized CRE transactions. This buyer is often a 1031 exchange investor seeking to redeploy capital from a recent sale, or an experienced operator rotating out of hands-on management into passive net lease income. Motivation is usually tax-deferred growth, diversification into multiple geographies, or a strategic shift toward lower operational complexity.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE closed a $4.8 million acquisition loan for a medical office NNN property in the southwest Houston submarket with a 12-year remaining lease term to a mid-tier healthcare operator. A national bank provided the capital at 6.75 percent with 70 percent LTV, 25-year amortization, and full recourse. The sponsor was a 1031 exchange buyer with prior multi-state NNN portfolio experience who valued the low tenant turnover risk and predictable cash flow. Closing occurred in 38 days and the borrower subsequently originated two follow-on acquisitions through the same lender relationship.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M NNN Acquisition Houston FAQ

LTV typically runs 60 to 75 percent for investment-grade single tenants with strong lease terms. Shorter lease length or lower tenant credit may push LTV to 60 percent or below. Non-recourse programs often require lower LTV, typically 65 percent or less, to offset lender risk.
National and regional pharmacy, quick-service restaurant, banking, and medical office tenants draw the tightest spreads due to consistent performance and low default history. Local industrial and retail users backed by strong balance sheets also perform well. Newer or less-capitalized tenants may add 25 to 50 basis points to the rate.
A 10 to 12 year remaining lease term typically supports 70 to 75 percent LTV and a base rate around 6.75 percent. A 15+ year term may allow 75 percent LTV or wider pricing (lower rates). Conversely, 5 to 8 year remaining terms compress LTV to 60 to 65 percent and may cost 50 basis points more.
Yes, CMBS conduit lenders and some national banks offer non-recourse structures, but typically require 60 to 65 percent LTV or lower. Full recourse is standard for bank and life company financing at higher LTVs. Non-recourse programs require a 6 to 12 month seasoning period after close before the borrower can exit without triggering lender approval.
National bank programs typically close in 30 to 45 days with straightforward underwriting. CMBS conduits require 60 to 90 days due to credit committee review and conduit structuring. Life companies generally fall in the 45 to 60 day range. Houston's active market and multiple lender options mean sponsors can often negotiate or run parallel processes to tighten the timeline.


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