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

$5 Million NNN Acquisition in Los Angeles

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million single-tenant net lease acquisition in Los Angeles represents the sweet spot for institutional and experienced investor buyers seeking stabilized, long-term income with moderate leverage. At this loan size, borrowers gain access to the full spectrum of STNL-focused lenders, including national banks with dedicated net lease programs, regional credit unions, and life insurance companies competing aggressively on rate and structure. LTV typically ranges from 60 to 75 percent depending on tenant credit quality and remaining lease term, with rates in the 6.50 to 7.00 percent range reflecting current market conditions and the stability of the underlying net lease cash flow. Los Angeles' diverse tenant base and strong real estate fundamentals make this loan size particularly attractive to 1031 exchange buyers and seasoned investors managing multi-property portfolios.

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Capital Stack

What a $5M NNN Acquisition Capital Stack Looks Like

At $5 million, the capital stack is straightforward and lender-driven. A single primary lender typically funds the entire loan amount, with the decision between a national bank STNL program, a life company, or a regional credit union depending primarily on lease length, tenant credit, desired recourse structure, and the borrower's appetite for non-recourse pricing. Tenant credit and remaining lease term dominate the underwriting narrative far more than market conditions at this size.

Capital Source Rate / Cost Size / LTV Notes
National bank with STNL program 6.50 to 6.75 percent, CMT-indexed with fixed margin $3 million to $5 million at 65 to 70 percent LTV Full recourse, 15 to 20 year fixed terms, fastest timeline (30 to 45 days), appetite for investment-grade and non-investment-grade tenants with 7 plus years remaining
Life insurance company 6.75 to 7.00 percent, fixed rate 10 year to 20 year $2 million to $5 million at 60 to 70 percent LTV Full recourse standard, longer hold preference, lower prepayment penalties, strong appetite for credit tenants and 10 plus year lease terms
Regional credit union with CRE division 6.60 to 6.90 percent, CMT-indexed or fixed $1.5 million to $4 million at 60 to 65 percent LTV Full recourse, local market focus, faster approval for strong borrowers with presence in service territory, competitive on pricing
Debt fund or specialty STNL lender 7.00 to 7.50 percent, fixed rate $2 million to $5 million at 60 to 75 percent LTV Recourse or non-recourse available, flexible underwriting on tenant credit, willing to finance lower-credit tenants, 10 to 15 day underwriting

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 net lease buyer in Los Angeles is an experienced investor or family office with $10 million to $50 million in net worth, a track record of 5 to 15 prior acquisitions, and strong relationships with brokers and service providers. These sponsors are often executing 1031 exchanges following recent sales, building income-focused portfolios, or diversifying out of development risk into stabilized assets with predictable cash flow. Debt management is second nature; they understand lease quality, tenant credit analysis, and the importance of non-recourse structure if they intend to hold long-term and manage multiple debt positions.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE closed a $4.8 million acquisition loan for a single-tenant retail property in a Los Angeles submarket dominated by neighborhood-serving concepts and good demographics. The borrower, a seasoned 1031 exchange buyer, was refinancing and consolidating two smaller properties into one portfolio-building acquisition. The loan was sourced through a national bank STNL program at 6.68 percent fixed for 15 years, 68 percent LTV, with full recourse and a 10-year lease to a national credit-rated tenant. The borrower closed in 32 days and immediately began executing their next acquisition within 90 days, using the stable debt structure to fund additional properties in secondary Los Angeles markets.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M NNN Acquisition Los Angeles FAQ

National banks will finance investment-grade tenants (S&P BBB minus and higher) at top rates and highest LTV. Non-investment-grade tenants with strong operating history, market presence, and 7 to 10 plus years remaining on the lease are typically acceptable at slightly lower LTV (65 to 68 percent) and higher rates (6.75 to 7.00 percent). Local or emerging brands require deeper credit analysis and may price at 7.00 to 7.50 percent.
Non-recourse is available from life insurance companies and specialty debt funds, typically at 60 to 65 percent LTV maximum and at rates 25 to 50 basis points higher than recourse offerings. Non-recourse borrowers must demonstrate strong cash-on-cash returns and tenant credit to justify the reduced lender recourse. National banks rarely offer non-recourse at this loan size.
Fixed-rate 15 year terms are market standard, with some lenders offering 10 year, 20 year, or 25 year options. Most loans are fully amortizing with 25 to 30 year amortization schedules, keeping payment management favorable for income-focused sponsors. Rates are typically fixed for the full term; floating-rate or CMT-indexed programs are available but less common for net lease borrowers seeking payment certainty.
National banks typically close in 30 to 45 days with complete financial packages. Life companies and regional lenders often take 45 to 60 days. Specialty debt funds can move faster (15 to 25 days) but usually charge higher rates. Title work, lease review, and appraisal turnaround drive most delays; pre-approval and pre-underwriting can accelerate closing significantly.
STNL lenders focus less on traditional DSCR and more on lease certainty, tenant credit, and remaining lease term. A minimum 1.15x to 1.25x cash-flow DSCR (NOI to debt service) is typical if the tenant pays most operating costs, but this varies widely based on tenant strength and market positioning. Lenders ultimately underwrite to LTV and lease quality rather than income multiples.


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