Commercial property Archives - America Mortgages

One source, multiple options

America Mortgages is a Super Broker with an emphasis on the U.S. mortgage market. We specialize in Residential, Commercial, Construction, and Bridge financing for Non-U.S. Citizen, U.S. Expats, Family Offices, and Institutions. With the ability to lend in all 50 U.S. States (for most programs) and Internationally, America Mortgages is the “go-to” source for global Real Estate financing.

America Mortgages has direct relationships with U.S. banks, Asia regional banks, private mortgage lenders, and global funds to directly offer market-rate loan programs to the borrower in Asia or abroad.

The Power of YES! Over 11 languages/dialects spoken, cultural understanding, regional representation, and the ability to open an application and close the mortgage in most locations without leaving your home country.

Our U.S. mortgage programs include:

U.S. Expat Mortgages
Non-U.S. Citizen/Foreign National Mortgages
Construction and Commercial property loans
Bridge lending
Hard/Soft money loans
Cross Collateral
Fix-n-Flip

Our international mortgage programs include:

Large scale, global bridge financing – US$3M minimum and up in most countries
Residential mortgage loans in various countries with a minimum loan amount of US$100k

For more information, please contact [email protected].

In short, a CAP rate on a commercial property is simply a way for investors, lenders, and other real estate professionals to quickly see the strength of the subject property and the likely one year unleveraged (meaning the property is purchased with cash) return that the property may generate. Like any other investment, investors need a way to compare one property with another and have a way to measure which is the stronger (less risky) investment – or vice versa, if they are willing to take on more risk, for more potential return; the CAP rate is that measurement.

The lower the CAP rate, the stronger (and more expensive) the property is. In a major market, think San Francisco or LA, you can expect to see CAP rates in the 4%-5% range. CAP rates can be in the higher single digits in a tertiary market and increase into double digits. In the most basic terms, an investor looking at a building with a 4% CAP should expect that building to yield approximately 4% in one year. An 8% CAP will be a property with a higher risk profile, hence the higher potential return required by sponsors (8%).

The CAP rate is usually always published on real estate presentations or websites, though it can be easily calculated. Take the Net Operating Income (NOI) of the property and divide it by the current market value as per current market prevailing rates.

CAP rates should be used as a quick basis for measurement to compare properties but not fully base a decision on. The reason for this is that CAP rates fluctuate based on the calculated NOI of the property, which can change based on the year, location, expenses for the building, etc. The CAP rate can also be adjusted based on who the intended reader of the information is. In summary, the CAP rate should be used as a quick measurement of a properties’ strength. If the estimated returns fit your investment profile, you should dig deeper into the property’s details.