Commercial Real Estate

Commercial real estate financing addresses one of the most substantial capital needs businesses face: acquiring, refinancing, or developing the physical property from which they operate. Whether you're a growing service firm ready to move into your own building instead of renting, a retailer acquiring a prime location, a manufacturer building a custom facility, or an investor purchasing rental properties, commercial real estate financing provides the capital to make these major acquisitions possible.

Commercial real estate loans are fundamentally different from residential mortgages. The loan amount, terms, and structure are based on the property's income-generating potential and the business's ability to service the debt. A property generating $500,000 annually in rental income can support a larger loan than an identical property generating only $250,000. Lenders evaluate cash-on-cash returns, debt service coverage ratios, and the stability of the income stream. For owner-occupied commercial real estate (where the business operates the property), lenders also consider the business's profitability and cash flow.

Nautix Capital finances multiple types of commercial real estate transactions. For owner-occupied properties, we finance acquisition of retail spaces, office buildings, manufacturing facilities, warehouse space, or any commercial property where your business operates. For investment properties, we finance rental properties generating income from tenants. We also finance development and redevelopment projects, where you're purchasing land or an existing property to improve and enhance. Construction financing bridges the gap during the building phase, converting to permanent financing once construction is complete.

The down payment requirements for commercial real estate are typically 20-30% for owner-occupied properties and 25-35% for investment properties. This is higher than residential mortgages but lower than many alternative financing options. Loan amounts range from $100,000 to several million dollars depending on the property value, the business's financial position, and the income generated by or expected from the property. Loan terms typically extend 10-20 years, providing manageable monthly payments while allowing you to benefit from property appreciation.

One key advantage of commercial real estate financing is the fixed payment structure combined with property appreciation. Your monthly mortgage payment is predictable and fixed (assuming fixed-rate financing), but the underlying property typically appreciates 2-3% annually over the long term. After 10-20 years, you've built substantial equity through principal repayment and property appreciation. Additionally, real estate provides collateral security—if business circumstances change and refinancing becomes necessary, the property's equity can be leveraged.

The application process for commercial real estate financing requires comprehensive documentation. You'll need personal and business tax returns for 2+ years, detailed business financial statements, current lease agreements (for investment property), and appraisal of the property. For owner-occupied properties, lenders also evaluate the stability and quality of the business occupying the property. The underwriting process typically takes 20-30 days, during which appraisals are ordered, leases are reviewed, and financial analysis occurs. Once approved, closing typically occurs within 30-45 days.

Commercial real estate financing is particularly valuable for established businesses ready to build long-term asset base. Instead of paying rent indefinitely with no equity buildup, you invest in ownership. Building equity in real estate positions your business for additional capital access—after 3-5 years of ownership and principal paydown, the property becomes a valuable asset you can refinance against if you need working capital. This dynamic of using real estate as a platform for business growth is why many successful businesses transition from renting to owning.

Commercial Real Estate rates currently range from 4.5% to 8.5% depending on your specific real-time credit tier, monthly revenue, and time in business. Use our interactive payment estimator below to calculate your exact estimated rate and monthly payment based on your business profile.