Office Building Mortgages

Commercial Financing in Canada

The purchase of an office tower or professional building is a large undertaking. It can also make for a great investment opportunity and a continual, growing income source. So too is going through office building mortgages.

Office, professional and medical centres generally only appreciate in value. Moreover, they can provide sound, reliable revenue. That is why finding the best office building mortgages is so important.

What to Consider in a Commercial Building

There are several items that you or your business should consider. Ensure that the building that you’re applying for a mortgage on is a viable investment.

  • Down payment: Office building mortgages generally call for a 25 per cent down payment. Consider how you will provide this. Common options include refinancing another property owned or looking for investors.
  • Revenue: Properties need to generate $1.30 of income for every $1.00 of debt to be viable. Examine the building’s projected earnings and past records thoroughly.
  • Repairs and Building Maintenance: Ensure the building is appraised and inspected by reputable professionals. Factor in any repairs or renovations that need to be completed into your budget. Additionally, any long-term property and parking lot maintenance, landscaping, insurance and property tax.
  • Vacancy: Finding long-term tenants to lease professional space can be more difficult than finding residential renters. Ensure the current occupants of your future building can sustain the building’s income. Determine if the building you intend to purchase has more vacant units than other buildings in the area. Also, know if the entire area has a higher than average rate of vacancy than other sections of the city or town site in which it’s located.
  • Administration: Do you or your company possess the faculty to take on the added tasks of administering units, tending to tenant inquiries and property upkeeps, or will you need to hire additional staff? Another item to consider in your budget.

Applying for Office Building Financing

Super Brokers will be your guide in attaining the right mortgage for your office or professional building purchase. A commercial mortgage representative can help. They walk you through the process, ensuring that you get the specific information that you need:

  • Present rent roll – Includes unit information, lease abstracts and tenant descriptions.
  • Income and expense statement – Includes annual property tax, insurance, utilities, water, management plan, maintenance and repairs.
  • Detailed physical description, survey and appraisal of the property.
  • Contract of sale, if property is an acquisition.
  • Current financing summary, if property is being purchased with a refinance of another mortgage.
  • Details on any intended or present management company.
  • Present financial statement.

The purchase of an office or professional building may feel, at times, overwhelming. Contact us today to utilize the expertise of Super Brokers Mortgage to ensure the financing you attain to fund your venture is optimal.

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