Large Commercial Real Estate Loans

What changes above $25M

Many banks that compete hard on smaller loans run into lending limits, concentration caps, or deposit relationship requirements as requests grow past $25M. The lender pool shifts toward capital sources built for larger balances, each with its own preferences on asset quality, business plan, and structure. The loan also becomes a bigger credit event for the lender, with committee review, broader diligence, and closer attention to the sponsor.

Capital Partners' largest published financings include a $30M construction loan for luxury single-family homes in Montecito, a $26.2M lease-up bridge loan on an 82-unit multifamily property in San Diego, a $24M ground-up construction loan for an 82-unit multifamily project in San Diego, a $22.15M SBA 504 loan in Moorpark, and a $22M ground-up construction loan for a 39-unit mixed-use project in Toluca Lake. Those transactions used different capital sources: construction lenders, a bridge lender for lease-up, and an SBA 504 structure for an owner-user.

Lender types for $25M to $100M loans

Matching the request to the right group matters at this size, because a poorly matched lender can carry a large deal deep into diligence before declining it. Asset quality, market depth, and whether the business plan is stabilized or transitional narrow the field quickly. Loan structure preferences such as recourse, prepayment flexibility, and future funding narrow it further. A sponsor planning to sell within a few years, for example, will weigh prepayment terms very differently from a long-term holder.

• Life insurance companies: conservative loan-to-value, long-term fixed-rate loans on high-quality stabilized assets, selective on market and sponsor
• CMBS lenders: nonrecourse fixed-rate loans on stabilized income, with standardized terms, cash management provisions, and limited flexibility after closing
• Debt funds: floating-rate bridge and construction loans for transitional business plans, with more flexibility at a higher cost
• Bank syndicates and club deals: a lead bank holds part of the loan and brings in participant banks, common on construction and relationship credits

Sponsor net worth, liquidity, and track record

Large loan lenders underwrite the sponsor as a balance sheet. Most set net worth and liquidity tests relative to the loan amount and verify them with financial statements, schedules of real estate owned, and bank and brokerage statements. Contingent liabilities from guarantees on other projects count against that strength, so a sponsor carrying several active construction loans can look thinner than its statement suggests.

Track record carries equal weight. Lenders want completed projects of similar scale and type, and they ask about past loan modifications, defaults, and litigation. Sponsors raising outside equity should also expect questions about the equity partners, their commitment documents, and who controls major decisions. A key principal with direct experience on comparable assets is often a condition of approval.

Third-party reports and legal scope

Diligence expands with the balance. Expect a full appraisal with a detailed market analysis, property condition and environmental reports, zoning reports, seismic reviews in earthquake-prone areas, and on construction loans an independent consultant reviewing plans, budget, and each draw. Lender legal work grows as well, covering guarantees, reserves, cash management, and intercreditor terms when there are multiple capital layers. Ordering reports in the right sequence and budgeting for them early keeps a large closing on track.

Layering mezzanine debt and preferred equity

Large transactions often pair a senior loan with mezzanine debt or preferred equity to reach the total capitalization. The senior and mezzanine lenders sign an intercreditor agreement covering cure rights, foreclosure on the pledged ownership interests, and approval of replacement owners. Preferred equity sits inside the ownership entity and relies on the operating agreement for remedies. The senior lender approves the subordinate provider and its terms, so bringing both sides in early avoids renegotiating the senior loan late in the process. See mezzanine and preferred equity for how each layer is priced and documented.

Execution certainty

On a large loan, a lender that re-trades terms after the appraisal can cost more than the rate savings it offered. Sponsors should weigh a lender's record on similar balances, the approval process behind the term sheet, and the deposits required before committee. Capital Partners matches each request against lender criteria tracked by property type, structure, loan size, geography, and current appetite. Start with the loan sizing calculator, then submit the deal for a principal's review.

Published closings

See all 30 transactions

Common questions