Refinancing Mixed Use Building

[Christina Vandivier]

I manage a mixed-use building; 299 apartments and 14 retail spaces. The owners purchased the property in 2011, so it is fairly new. They had 3 years of interest only followed by 10 years of principal/interest payments. Their maturity date is 3/2023, at which time they'll either need to pay the remaining balance or refinance. 

They are having me work on a 20-year capex budget and a valuation of the property, so that we can begin to look at our options. Rates are actually great right now, but who knows what 2023 will look like (aside from looking at forecasts and assuming they'll be right for the sake of the scenario). As part of this project, I am looking through different loan scenarios so that they can get an idea of what to expect in a few years. However, though I have 8+ years experience in property management, I have never been involved in the commercial loan process itself. I really want to make sure my numbers are as close to accurate as possible.

At the maturity date, we will have 40% in equity (based on the original loan amount). Depending on what it appraises for, it could be more or less than that. My main question here is: What is a realistic down payment for a commercial refinance? If our LTV is 60%, will we need to put much down, if anything, if the standard LTV is 75%?