Warehouse & Industrial
Warehouse and industrial property financing
Industrial splits cleanly in two: a business buying the building it operates from, and an investor buying it for the income. They are underwritten differently and often by different lenders, so we ask which you are before anything else.
الخطوة 1 من 5
شراء عقار تجاري أو إعادة تمويله
عن العقار
ابدأ بنوع العقار وبما تحاول إنجازه.
Owner-occupied or investment — it changes everything
If your own business will occupy the building, the SBA programmes are usually the strongest route: longer terms and a smaller down payment than conventional commercial financing, because they exist precisely to help a business buy its premises. Your business's own numbers carry the file.
If you are buying it to lease out, it is a commercial investment loan underwritten on the building's income — the tenant, the lease term and the coverage that produces. A vacant industrial building bought to lease up is usually a bridge first and permanent financing after.
The building itself matters more here than in most commercial categories: clear height, loading doors and docks, power, column spacing, the yard and truck access. These decide who can use it, which decides what it is worth.
What lenders look at
Who occupies it
Your business or a tenant. This is the first fork, and it decides the product.
The building's specification
Clear height, docks, power and access. A building only a narrow set of users can occupy is valued accordingly.
Income or business cash flow
The rent for an investment purchase; your business's own numbers for an owner-occupied one.
Lease term
On an investment, how long the tenant is committed for, and what happens after.
Condition and environmental
Prior industrial use can trigger environmental review. Worth raising early rather than late.
Down payment
Commercial generally needs more than residential, though an owner-occupied SBA route usually needs less than a conventional one.
Questions we get asked
My business will use the building. Is that different?
Yes, and usually better. Owner-occupied purchases can go through SBA programmes, which typically means a smaller down payment and a longer term than conventional commercial financing.
Can I buy a vacant warehouse?
Yes, though a vacant building usually starts on bridge financing and moves to permanent money once it is leased or occupied.
How much do I need to put down?
It varies by lender and by route. An owner-occupied SBA purchase generally needs less than a conventional investment purchase. We will tell you what the lenders we would approach actually publish.
Does prior industrial use cause a problem?
It can trigger an environmental review, which is a timeline issue more often than a deal-killer. Tell us what the building was used for.
Can I take cash out of a warehouse I own?
Often, subject to the value, the equity and the lender's limit. Whether your business occupies it affects the route.
What about flex or small-bay industrial?
Financeable and common. Multi-tenant flex is underwritten much like a small plaza — on the rent roll.
Who this page is for
- Buyers of a warehouse, distribution or light industrial building.
- Businesses buying the building they operate from.
- Owners refinancing or taking cash out of an industrial property.
- Investors buying a single-tenant industrial asset with a lease in place.
- Buyers of flex space, self-storage or a small industrial park.
What this financing covers
- Buying a warehouse or distribution building.
- Owner-occupied industrial premises.
- Refinancing existing industrial debt.
- Cash-out for expansion, racking or equipment.
- Flex, light manufacturing and self-storage.
- Bridging a purchase while a tenant is found.
The words you will hear, in plain English
Industrial buildings are judged on how usable they are, so most of this vocabulary describes the building rather than the lease.
- Clear height
- The usable height under the lowest obstruction. It decides how high a tenant can stack, and it is one of the first questions any industrial buyer is asked.
- Dock doors
- Loading doors at trailer height. How many there are, relative to the floor area, shapes who can use the building.
- Drive-in door
- A ground-level door a vehicle can enter through. Different tenants need different mixes of these and docks.
- Column spacing
- The distance between the supports. Wide spacing means flexible racking; tight spacing rules some uses out.
- Office finish ratio
- How much of the building is office rather than warehouse. Too much is as much a problem as too little.
- Truck court
- The yard depth for trailers to manoeuvre. A shallow court can make an otherwise good building unusable for distribution.
- Owner-occupied
- You run your business from the building. It opens SBA routes that an investment purchase cannot use.
- Single tenant
- One occupier on one lease. Simple while they are there, and completely empty when they are not.
- NOI and DSCR
- The income after operating costs, and whether it covers the payment with room to spare. The central test on an investment purchase.
- Phase I ESA
- An environmental assessment of the site's history. On industrial property it is close to standard, because of what previous occupiers may have done.
How these deals are put together
Illustrative structures, to show how industrial files are assembled and what a lender weighs. Not offers, not quotes, and not terms available to anyone in particular — figures and structures vary by lender and by property.
A business buying its own building
An operator leaving a lease behind. Occupying it opens SBA programmes, which are often the better terms available to an owner-occupier.
Single tenant, lease in place
An investment purchase underwritten on the lease. The tenant's covenant and the remaining term matter as much as the building.
Bought empty
No income today. Often a bridge while a tenant is found or the owner moves in, with permanent financing once it is occupied.
Specialised for one user
Heavy power, cold storage, unusual configuration. Financeable, but the lender is thinking about who else could use it.
What to prepare
Industrial files turn on the building's specification and, almost always, on the environmental history of the site.
- The purchase contract, or the existing loan payoff
- Building specification: size, clear height, docks, power
- The lease, where the building is tenanted
- Rent roll, where there is more than one occupier
- Two to three years of operating statements
- Your business financials, where you will occupy it
- Environmental reports, if any exist
- Property photos and a site plan
- Entity papers: articles, operating agreement, EIN letter
- Your personal financial statement and track record
- Tax and insurance bills
- Proof of funds for your contribution
From application to closing
- 1
Occupier or investor
Will you run your business from it, or lease it out? That answer decides whether SBA programmes are even on the table.
- 2
The building
Size, clear height, docks, power and site. Industrial deals turn on usability more than on appearance.
- 3
The income, or your business
A lease if there is one; your own operating figures if you will occupy it.
- 4
Application and documents
Specification, financials and entity papers.
- 5
Appraisal and environmental
Commercial appraisal, and a Phase I — on industrial property, expect it rather than hope to avoid it.
- 6
Underwriting
Coverage or business cash flow, the building's marketability, and your experience.
- 7
Closing
Title, insurance, signing and funding.
What goes wrong
Buying a building only one tenant could use
A specialised fit-out narrows who can take it next, and lenders price that in.
Not checking the power supply
Upgrading electrical service to an industrial building is slow and expensive. Confirm what is there before you commit.
Ignoring the truck court
A building with the right height and the wrong yard depth cannot serve distribution at all.
Assuming zoning permits your use
Industrial zoning is not one thing. Check the specific permitted uses for the specific parcel.
Treating environmental as optional
On industrial land, previous occupiers matter. A Phase I is near-standard, and a Phase II sets the timeline.
Underestimating the vacancy risk
A single-tenant building is either fully let or completely empty. Plan for the second case before it happens.
Related financing
- Commercial real estate →Other property types and how each is financed.
- Shopping plazas and retail →More tenants, shorter leases, different risks.
- SBA financing →Often the better route when you will occupy the building.
- Equipment financing →Racking, forklifts and machinery, financed separately.
- Bridge loans →Buying empty, financing permanently once it is occupied.
Tell us about the building
Start with whether your business will occupy it — that decides the route.
الخطوة 1 من 5
شراء عقار تجاري أو إعادة تمويله
عن العقار
ابدأ بنوع العقار وبما تحاول إنجازه.
This is not an offer and not an approval. Terms are set by a lender, in writing, after underwriting, and vary by lender, by property and by file.
Looking at a warehouse?
Send us the building and whether you will occupy it or lease it out. We will tell you which route fits and what it would take.