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

$5 Million NNN Acquisition in San Diego

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million single-tenant net lease acquisition in San Diego represents a core-plus play for experienced CRE investors seeking stable cash flow in one of the West Coast's strongest coastal markets. At this loan size, borrowers typically target investment-grade tenants on 10 to 15 year leases with 2 to 3 percent annual bumps, delivering cap rates in the 5.5 to 6.5 percent range. Lenders in this space include national banks with established STNL platforms, life insurance companies seeking longer-duration assets, and CMBS conduits competing aggressively for credit-quality deals. Rate environment sits around 6.75 percent, with leverage running 65 to 75 percent LTV depending on tenant strength and lease duration.

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Capital Stack

What a $5M NNN Acquisition Capital Stack Looks Like

National banks dominate the $5 million STNL market in San Diego, attracted by the combination of stable tenancy and predictable underwriting. Life insurance companies and regional debt funds are increasingly active at this level, seeking to deploy capital at higher LTVs than traditional conduits. Lender selection typically hinges on tenant credit quality, remaining lease term, and the sponsor's willingness to carry recourse or seek non-recourse pricing at lower LTV.

Capital Source Rate / Cost Size / LTV Notes
National bank with STNL platform 6.50 to 7.00 percent (CMT-based index plus 275 to 325 bps) 3.5 to 4.0 million (70 to 75 percent LTV) Typically first-lien position, loan officer continuity, 30 to 45 day close, recourse to sponsor or non-recourse at 60 to 65 percent LTV
Regional life insurance company 6.75 to 7.25 percent (fixed rate or CMT-based) 3.0 to 3.75 million (60 to 70 percent LTV) Longer hold bias, strong tenant preference, lower loan costs for 12+ year leases, non-recourse standard, 45 to 60 day close
CMBS conduit lender 6.50 to 6.95 percent (fixed or floating rate, spreads 225 to 275 bps over SOFR) 3.25 to 4.25 million (65 to 72 percent LTV) Securitization execution, rapid funding, standardized underwriting, seasoned tenant requirement (3+ years typical)
Credit union or regional bank 7.00 to 7.50 percent (prime plus or fixed rate) 2.0 to 3.0 million (40 to 60 percent LTV) Flexible terms, relationship-focused, faster decisions for existing borrowers, full recourse typical, serves as gap or supplemental piece

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 STNL buyer in San Diego is a seasoned investor with 10 to 50 million in net worth and a track record of 5 to 15 acquisitions in the single-tenant space. Many are 1031 exchange buyers rolling proceeds from prior sales into stable, long-term holds; others are family offices or institutional subsidiaries seeking inflation-protected cash flow in a high-growth coastal market. These sponsors prioritize tenant credit quality and lease durability over value-add upside, and they often maintain in-house asset management to monitor rent escalations and renewal negotiations.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE arranged a $4.8 million loan for a Rolex boutique location in central San Diego occupied by a globally traded luxury goods company on a 15 year triple-net lease with 2.5 percent annual bumps. A regional life insurance company closed the transaction at 6.82 percent fixed, 68 percent LTV, non-recourse, with a 50 day timeline. The borrower, a family office relocating from out of state, leveraged the predictable 5.8 percent cap rate to hold the asset for income while benefit from steady lease-rate escalations. The transaction closed without extension and funded into a 1031 exchange structure.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M NNN Acquisition San Diego FAQ

National banks and life companies will typically lend 70 to 75 percent LTV, meaning you could see a loan in the 3.5 to 3.75 million range. Some aggressive conduit lenders will go to 75 to 80 percent LTV on credit-quality tenants with long lease terms remaining, but you lose pricing (30 to 50 bps higher rate) for the extra leverage. Equity checks typically run 1.5 to 2.0 million for quality properties in San Diego submarkets.
1031 buyers are preferred by lenders in this space because they demonstrate committed capital and lower refinance risk. Most national banks and life companies have streamlined processes for exchange structures and can close in 35 to 50 days with proper coordination between your QI, seller, and title company. Ensure your loan application clearly identifies the exchange and provides the 45-day identification and 180-day closing timeline to avoid rate locks or extension fees.
Lenders prefer 10+ years of remaining lease term, with 12 to 15 year leases seeing the best pricing and non-recourse terms. Cap rates in San Diego for investment-grade single-tenant properties range 5.25 to 6.75 percent depending on submarket, tenant credit, and local competition. Life insurance companies will extend beyond 10 years to acquire deals with cap rates below 6.0 percent; banks typically stay at 6.0 to 6.75 percent.
Non-recourse loans are available from life insurance companies and some regional banks at 60 to 70 percent LTV on credit-quality tenants with 12+ year leases. National bank platforms often require some form of recourse at LTVs above 65 percent, though they may offer reduced recourse (carve-outs only) at the low end. Expect a 25 to 50 bps pricing penalty to go non-recourse versus full-recourse terms on the same deal.
National banks typically close in 30 to 45 days with appraisal, title, and tenant credit review as standard contingencies. Life insurance companies run 45 to 60 days due to longer underwriting and legal review. Most lenders require final lease and tenant financials 10 to 14 days before closing, and any material lease amendment or tenant change will delay funding by 2 to 4 weeks while underwriting reviews the new terms.


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