Access Funds Using Our Strip Center Financing Solutions
February 16, 2023
As small businesses grow, they often look at commercial real estate locations such as strip centers to establish a new brick-and-mortar presence. This situation can create enormous opportunities for individual partners to invest in the construction of new strip malls and retail shopping centers to support the needs of businesses in the area.
The key to success for individual partners is having access to reliable financing solutions to buy and develop commercial real estate properties.
If you are a real estate investor or part of a group of individual partners needing strip center financing, consider pursuing a commercial loan through Texas Gulf Bank. We work with borrowers throughout the Gulf Coast region to support financing needs.
Learn about the various commercial loan programs available, the ideal borrowers for a strip center or multi-tenant property, and the application process with our bank.
What Are Your Strip Center Financing Options?
Strip centers and retail shopping areas offer potential tenants a wide range of leasing options. For many small business owners, retail strip centers are a popular choice because they are reliable, strategically located near a target customer base, and cost-effective.
Retail centers typically have an anchor store that helps attract customers to the location, creating business opportunities for smaller tenants. Or, some retail centers have a non-anchored property with a diverse mix of tenant businesses such as barber shops, pharmacies, nail salons, coffee shops, and specialty retailers.
Whether you plan to purchase land to construct a new retail strip center, or acquire an existing strip mall and renovate it to attract more tenants, you can find desirable commercial financing options through Texas Gulf Bank.
Commercial Construction Loans
These short-term loans allow individual partners to purchase raw land and construct new strip centers and shopping centers. Construction loan funds are disbursed based on a draw schedule as construction milestones are met, and the loan can later be converted into a permanent loan.
For construction loans, we typically require that at least 50% of the planned development is already leased out and that loan applicants have committed leases from future tenants. A letter of intent (LOI) from smaller tenants or anchor tenants adding up to at least 50% of the space should suffice.
Commercial Real Estate Loans
Individual partners may need funding to acquire an existing strip center or retail shopping area. A commercial real estate loan allows business owners to purchase an existing retail property or strip center to add to their portfolio.
For investors interested in purchasing an existing strip center or retail area, we will need confirmation that at least 75% of the tenant space is leased or will be leased.
We will also review the schedule of when lease agreements are set to come due. This step allows us to verify that loan agreements are spread out, preventing the risk of high turnover at any given period of time.
Ideal Candidates for Strip Center Funding
When applying for financing through our bank, it’s important to understand the factors that will help your business have the best chance for loan approval. The ideal candidates for strip center financing are individual partners who meet these qualifications:
- A proven history of success investing in small to medium-sized retail centers.
- An established portfolio of successful locations in the area.
- A stable tenant base at each existing location.
Additionally, applicants should have secondary liquidity in their other properties to help repay a loan in the event that an anchor tenant leaves or the business experiences any financial shortfalls.
The presence of additional liquidity and steady cash flow will help establish loan worthiness and be a resource to draw from if future renovations or improvements are needed, especially if acquiring older properties.
How to Apply for Strip Mall Financing
The application process starts with a comprehensive loan assessment to determine if loan qualifications are met. Our team of qualified lenders will review your business situation, ask questions, and help you choose the best course of action for your situation.
As you advance in the application process, applicants should be prepared to provide financial documentation including, but not limited to:
- Completed loan application
- Personal financial statements from each guarantor on the loan
- 3 years of business operating statements
- 3 years of business and personal tax returns
- Current or pending leases for new strip center
- Current lease history for existing properties
- Phase 1 ESA (Environmental Site Assessment) for new construction
- Construction plans and budget for new construction or renovation
Having a successful portfolio of additional strip center holdings is very helpful in the review process. This information may help validate our request for equity to secure loan funding since your additional holdings could be used as additional collateral.
Discover The Benefits of Choosing Texas Gulf Bank
Texas Gulf Bank understands the financial needs of individual partners looking to expand their strip center portfolio holdings. We strive to offer dependable and strategic loan programs that meet your specific objectives and business needs.
You will discover that having the right banking partner will make all the difference when you want to expand your business by building a new strip mall or purchasing an existing retail shopping center. Our lenders will work hard with you to find the right lending solution that fits your unique needs.
Our team has extensive market knowledge and experience to support your specific request. Our team of loan officers can guide you through each step of the loan application process while also researching key factors that could impact your strip center purchase or long-term success.
We will work with you to investigate potential red flags regarding market competition, parking, permit or zoning restrictions, tenant mix, ESA findings, and any other issues that could affect your deal.
As a local community bank, we offer prompt in-house loan reviews for a faster loan application process and quick funding if approved. We strive to provide funding solutions and dedicated client support to make your lending experience with Texas Gulf Bank productive and beneficial.
To learn more about strip center financing options with Texas Gulf Bank or to begin the loan application process, contact Texas Gulf Bank today. You can also complete our contact form to get in touch with one of our lenders.
All Loans Subject to Credit Approval