The current office reality
Office is a deal-by-deal market right now. Lenders are open for well-located Class A buildings with long weighted-average lease term and creditworthy tenants. They are mostly closed for Class B suburban office with material near-term rollover. Underwriting is at 50% to 65% LTV across most of the market, well below pre-2022 norms.
Medical office is a different story. Sticky tenants, long leases, and reliable cash flow make MOB one of the more favored asset classes inside the office bucket.
What gets a deal financed
Tenant credit, weighted-average lease term, and a credible reserve structure for TI/LC and rollover. Lenders also weight the sponsor's track record and ability to fund any cash-management triggers if performance dips. We package deals to surface those items up front.
Typical office loan terms
| Loan type | Potential fit |
|---|---|
| Life company permanent | Low-leverage, long-term leases to strong tenants |
| CMBS conduit | Well-leased buildings that need non-recourse |
| Bank permanent | Local owners with a banking relationship |
| Bridge (debt fund or bank) | Repositioning, lease-up or conversion |
Loan proceeds, pricing and terms depend on the property and lender underwriting. Send the property details to discuss financing.
What lenders underwrite on office
- Debt yield first. Office loans are sized to higher debt yields than other property types, which caps proceeds before LTV does.
- Rollover and leasing cost. Lenders budget tenant improvements, leasing commissions and free rent for every expiration in the loan term.
- Tenant credit and term. Long leases to strong tenants are what still finance at competitive terms.
- Plan for vacancy. A credible leasing plan, or a conversion plan, matters more than the in-place cash flow on a transitional building.
What to have ready
- Rent roll and lease abstracts with expirations by year.
- Leasing activity: current proposals, tours and broker opinion on market rents.
- TI and leasing commission budget for the next five years.
- Operating statements for the trailing 12 months and two prior years.
Frequently asked questions
Are lenders still financing office properties?
Yes, but selectively. Class A with long WALT and credit tenancy gets done. Class B suburban with significant rollover risk is much harder. Medical office remains relatively liquid.
How do maturing leases impact office refinancing?
Near-term rollover materially compresses leverage and pricing. Lenders frequently require structured TI/LC and rollover reserves, sometimes funded out of loan proceeds.
What LTV is available for office financing today?
55% to 65% on most stabilized institutional office. Medical office can reach 65% to 70%.