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WHO IT SUITS

Owner-operators buying the premises their business runs from

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PROPERTY TYPES

Industrial and warehouse, plus retail, office and mixed-use

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WHY TERMS IMPROVE

Corporate guarantee from the operating company

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WHERE WE OPERATE

​British Columbia and Alberta, from our Vancouver office

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LENDER FIELD

​Schedule I banks, credit unions, life companies and private funds

What is an owner-occupied commercial mortgage?

​An owner-occupied commercial mortgage finances a property that the borrower's own business will operate from, rather than lease out to unrelated tenants. Lenders treat these deals differently from investment purchases because repayment does not rest on the rent roll alone — it rests on a business the lender can underwrite directly.
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In today's Western Canadian market, the major Canadian banks compete actively for this business across both British Columbia and Alberta, and high-leverage options are available to owner-operators who can support the purchase with an operating company guarantee. The practical benefit is working capital: financing more of the purchase price leaves more cash in the operating business, where it earns a return.

Where the terms are actually won or lost is in how the purchase is structured, and in how the operating company's financial strength is presented to the lender.

The holdco-opco purchase structure

In most owner-user purchases we see at Crete Capital, the property is not bought by the operating business directly. It is bought by a separate real estate holding company, and three moving parts do the work.

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01
The holding company borrows

​The property sits in a separate real estate "holdco", which carries the debt and is the named borrower. This keeps the real estate asset and its financing apart from operating risk, and simplifies a future sale or succession.

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02
The operating company leases

​The opco signs a lease with the holdco and makes monthly payments on terms comparable to an arm's-length tenancy. That lease is what services the mortgage, so lenders read it closely — rate, term and renewal all matter.

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03
The corporate guarantee supports it

​The operating company guarantees the mortgage to the lender. This is a key element supporting owner-occupied pricing and leverage — without it, the holdco is simply an investor holding one asset.

Industrial Real Estate Mortgage

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How do you finance your warehouse space in Vancouver

When it comes to financing industrial properties for owner-users. The commercial mortgage terms are vastly different for purchasers supporting their investment with a operating company guarantee.
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In today's market, all of the big five Canadian banks in British Columbia are offering high leverage options to allow companies the ability to preserve their working capital, in support of their industrial real estate investment.

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PURCHASING STRUCTURE

In most cases, at Crete Capital, we see our clients purchase their industrial warehouse properties in a separate real estate holding company. This real estate "holdco" also carries the debt and is considered the Borrower. The operating company will sign a lease agreement with the holding company and make monthly payments to the entity similar to an arms length transaction. 

What allows for advantageous commercial mortgage terms in this scenario is the Corporate Guarantee provided from the operating company to the lender to support the commercial mortgage. The typical security structure includes a General Security Agreement and a first charge Collateral Mortgage on the property to be financed.

To learn more about the keys to securing competitive terms and best commercial mortgage rates with lenders for your industrial warehouse or commercial property in BC, Click HERE.

"The guys at Crete Capital are the best in business. They are experienced and they know how to get things done. We will definitely use them again in the future! Thank you Joey and Derek! Great Team!"

Vincent Mak, CEO
​CMS Metals Inc.

​Crete Capital is a specialized commercial mortgage broker based out of Vancouver, BC. Our team leverages our knowledge and relationships with top Canadian commercial banks to help you secure best in market terms and conditions for your commercial property financing needs and business growth.

Secure Industrial Mortgage

What lenders require

The security package on an owner-occupied commercial mortgage in BC or Alberta is fairly consistent across lenders. What varies — and what a competitive process is for — is leverage, pricing, amortization and how tightly the covenants are drawn.

• First charge collateral mortgage on the property being financed

• General Security Agreement over the borrower's assets

• Corporate guarantee from the operating company, often with an assignment of the lease

• Appraisal and environmental report — the latter is a common timeline risk on industrial sites

• Operating company financials, typically three years plus interim statements

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Leverage, rate and amortization are quoted deal by deal against the property and the strength of the operating business. Nothing on this page is an offer of financing, and all terms are subject to lender approval.

Why use a commercial mortgage broker

A single bank quotes one structure against its own credit policy. We package the operating company and the real estate as one credit story and run several lenders in parallel — which is how comparable term sheets, and real negotiating leverage, get created.

Crete Capital acts for the borrower through lender selection, credit presentation, term-sheet comparison and negotiation. For owner-occupied transactions, that means presenting both the real estate and operating company in a structure lenders can underwrite efficiently.

Owner-occupied commercial mortgages: common questions
What owner-operators ask us before they make an offer.

What is an owner-occupied commercial mortgage?
An owner-occupied commercial mortgage finances a property that the borrower's own business will operate from, rather than lease to unrelated tenants. Because the lender can look to the operating business for repayment as well as the real estate, owner-occupied financing generally carries higher leverage and better pricing than investment-property financing.

Why do owner-occupied buyers get better commercial mortgage terms?
​The operating company provides a corporate guarantee to the lender in support of the mortgage. That guarantee adds a second source of repayment alongside the property's cash flow, which reduces the lender's risk and allows higher loan-to-value and more competitive rates than an arm's-length investment purchase.

What is a holdco-opco purchase structure?
The property is purchased and held in a separate real estate holding company (holdco), which carries the debt and is the borrower. The operating company (opco) signs a lease with the holdco and pays monthly rent on arm's-length terms. This separates real estate from operating risk while keeping the operating company's credit available to support the mortgage.

Why use a commercial mortgage broker instead of going straight to my bank?
A single bank quotes one structure against its own credit policy. A broker packages the operating company and the real estate as one credit story and runs several lenders in parallel, producing comparable term sheets on leverage, rate, amortization and covenants — which is where most of the value is won on owner-occupied deals.

Does Crete Capital finance industrial and warehouse properties in Vancouver?
​Yes. Crete Capital is a commercial mortgage brokerage based in Vancouver, BC, and places owner-occupied financing on industrial and warehouse premises across British Columbia, alongside retail, office and mixed-use commercial property.

Does Crete Capital arrange commercial mortgages in Alberta?
Yes. Crete Capital arranges owner-occupied commercial mortgages in Alberta as well as British Columbia, including Calgary and Edmonton. Most of the lenders we work with are national or Western Canadian, so the same competitive process applies in both provinces; what differs is local appraisal and environmental practice, and which lenders are most active in a given market.