$7.5M NNN Acquisition Phoenix | Commercial Lending Solutions 
Loan Size Example

$7.5 Million NNN Acquisition in Phoenix

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $7.5M single-tenant net lease acquisition in Phoenix represents a core-plus entry point for experienced CRE investors seeking stabilized, long-term cash flow in a market with strong tenant demand and favorable cap rates. At this size, borrowers typically target institutional-quality tenants with investment-grade credit or strong regional presence, leases running 10 to 15 years, and cap rates in the 5.5 to 6.5 percent range depending on submarket and tenant profile. Lenders competing for this deal size include national banks with dedicated STNL programs, life insurance companies seeking longer-duration assets, and CMBS conduit lenders hungry for seasoned single-tenant collateral. Rates hover around 6.60 percent, reflecting current CMT-based pricing and the low-risk profile of a well-leased, covenant-backed asset in a growing Southwest market.

Get a Quote on Your $7.5M Deal →
Capital Stack

What a $7.5M NNN Acquisition Capital Stack Looks Like

At $7.5M, the capital stack typically breaks 65 to 75 percent leverage, with a single institutional lender providing the entire senior mortgage. National banks dominate this loan size because they can price competitively on CMT-indexed products and move quickly on underwriting; life insurance companies also compete aggressively when lease terms extend 12 years or longer, since they value the extended yield and lower prepayment risk. Lender selection hinges on tenant credit, lease length, and whether the borrower wants recourse or non-recourse leverage.

Capital Source Rate / Cost Size / LTV Notes
National bank with STNL program 6.50 to 6.75 percent (CMT-based, tied to 10-year or 5-year CMT plus 210 to 240 basis points) $5.2M to $5.6M (70% LTV on $7.4M to $8.0M estimated value) Full recourse, 25-year amortization, 10-year fixed-rate term, underwriting turnaround 2 to 3 weeks, locks quickly on rate. Preferred for investment-grade tenants and lease terms of 10 years or more.
Regional life insurance company 6.45 to 6.70 percent (fixed-rate, 10 to 12 year hold assumption) $5.0M to $5.8M (67% to 77% LTV depending on lease length and covenant strength) Full recourse, 25 to 30 year amortization, non-prepayment penalty in years 1 to 5, 60 to 90 day close, strong appetite for 12 to 15 year lease terms. Slightly lower rate if lease exceeds 12 years.
Credit union or wholesale lending platform 6.65 to 6.90 percent (CMT-based plus 220 to 260 basis points, variable rate option available) $4.5M to $5.5M (60% to 73% LTV) Full or modified recourse, 10-year fixed or 5-year adjustable, faster close (10 to 15 days), slightly wider spreads offset by speed and flexibility. Common for 1031 exchange buyers under time pressure.
CMBS conduit lender 6.55 to 6.80 percent (fixed-rate or soft floater), plus 50 to 100 basis points servicing/trustee fee $5.3M to $6.2M (71% to 82% LTV, full subordination allowed if securitization structure permits) Non-recourse or limited recourse, 10-year term, 30-year amortization, 4 to 6 week close, requires seasoned rent roll and audited financials. Attractive for borrowers wanting to exit recourse at higher leverage.

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 $7.5M NNN Acquisition Deal

The typical borrower acquiring a $7.5M NNN property in Phoenix is an experienced operator or 1031 exchange investor with $3M to $5M of liquid net worth, a track record of 3 to 5 prior single-tenant acquisitions, and demonstrated expertise in lease underwriting and tenant covenant analysis. Many are tax-deferred exchange buyers executing a redeployment from a prior sale, seeking a hands-off, long-term hold with monthly rent collections and predictable cash flow; others are opportunistic builders looking to diversify into core-plus income while they develop new product. These sponsors typically target institutional tenants (healthcare, automotive, quick-service restaurant, financial services) or strong regional operators with 8+ years of operating history, because lenders will push back hard on sub-investment-grade credits or short leases.

From the CLS CRE Pipeline

A Real $7.5M Example

CLS CRE closed a $7.2M financing for a single-tenant retail property in North Scottsdale, leased to a national drugstore chain with investment-grade tenant credit, on a 12-year lease with 2 percent annual bumps. The borrower, a repeat 1031 investor, elected to pair financing from a regional life insurance company at 6.48 percent on a 30-year amortization, full recourse, with a 10-year fixed-rate term and no prepayment penalty after year 3. The lender valued the long lease duration and strong tenant covenant and offered 72 percent LTV, allowing the sponsor to preserve equity and optimize cash-on-cash returns. The deal closed in 70 days and the borrower refinanced the same property four years later at a lower rate as lease maturity extended further into the hold period.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$7.5M NNN Acquisition Phoenix FAQ

Market-rate cap rates for institutional single-tenant properties in Phoenix are running 5.5 to 6.5 percent depending on submarket, tenant credit, and lease length. Investment-grade tenants or longer leases (12+ years) typically command 5.5 to 6.0 percent; regional or smaller-credit tenants or shorter leases (8 to 10 years) push toward 6.0 to 6.5 percent. Your exact entry cap rate should reflect your underwriting of rent growth and terminal value assumptions.
Yes, but only from CMBS conduit lenders and typically only at 70 to 75 percent LTV or lower. Banks and life companies almost always require full recourse on deals this size, though life companies may negotiate a 5-year recourse tail if lease term and tenant credit are exceptional. Non-recourse pricing typically runs 20 to 40 basis points higher than recourse, so weigh the risk mitigation against the cost.
A national bank typically closes in 3 to 4 weeks from complete application; a life insurance company takes 6 to 10 weeks due to more rigorous lease review and covenant analysis; a CMBS lender requires 4 to 6 weeks plus an additional 2 to 3 weeks for investor review if already in a securitization ramp. Have all rent roll, audited tenant financials, and lease documentation ready upfront to avoid delays.
Most lenders assume annual rent growth of 1.5 to 2.5 percent over the life of the loan based on market comparables and historical CPI; some use lease-embedded rent bumps if they are contractual (e.g., 2 percent annual step). For DSCR calculations, lenders typically cap growth at the embedded lease rate or local inflation forecast, whichever is lower, to be conservative on debt service coverage at renewal or extension.
No. Rate pricing is driven by loan structure, tenant credit, and lease terms, not the borrower's motivation or timeline. However, 1031 buyers under strict 45-day identification or 180-day close deadlines may pay for expedited underwriting or accept wider spreads from lenders that specialize in fast closes, so factor in speed premiums if time is your constraint.


Get a Quote on Your $7.5M Deal

Tell us about your transaction. We will run it past lenders that actively fund this size and product type and send back terms within 48 hours.

Apply for Financing →
Or call us: 310.708.0690

Weekly Market Intelligence

Rate updates, deal insights, and capital markets analysis. One email per week. Unsubscribe anytime.

No spam. No selling your data. Just market intelligence from a working broker.

Need financing? Apply in 2 minutes. Response within 24 hours.
Apply Now →
📈

Before You Go…

Get matched with the right lender from our network of 1,000+ capital sources.

Or call us: 310.708.0690

No spam. Unsubscribe anytime.