Commercial Real Estate Refinancing
Lower your rate, extend your term, or unlock equity—optimize your debt structure for today's market.
Your Property Has Changed. Has Your Financing?
Commercial real estate financing isn't a one-time decision. As your property appreciates, debt pays down, and market conditions shift, the loan that made sense at acquisition may no longer be optimal.
Refinancing gives you the opportunity to improve your debt terms, access trapped equity, or restructure your capital stack for the next phase of your investment strategy.
Brookmont Capital Ventures helps property owners evaluate refinancing options across banks, agencies, CMBS, debt funds, and SBA 504 programs—ensuring you capture the best available terms.
Why Property Owners Refinance
Lower Interest Rate
Interest rates fluctuate. If rates have dropped since your original loan—or if your property now qualifies for better financing—refinancing can reduce your cost of capital and increase cash flow.
Extend Loan Term
Facing a balloon payment or loan maturity? Refinancing into a longer-term loan provides stability and eliminates the pressure of near-term debt maturities. If you're coming off a bridge loan, permanent financing locks in stability.
Access Equity (Cash-Out)
Your property has likely appreciated since acquisition. A cash-out refinance lets you extract that equity to fund new investments, property improvements, or other business needs—without selling.
Remove Recourse
If your current loan requires personal guarantees, refinancing into non-recourse debt (CMBS, agency, or certain debt funds) can limit your personal liability.
Consolidate Debt
Multiple loans across properties? Refinancing can consolidate debt, simplify management, and potentially improve overall terms.
Improve Loan Structure
Replace floating-rate debt with fixed rates. Convert interest-only to amortizing. Adjust your debt structure to match your current investment strategy.
Refinancing Options by Lender Type
| Lender Type | Best For | Max LTV | Rate Type |
|---|---|---|---|
| Bank | Relationship borrowers, flexible terms | 65-75% | Fixed or floating |
| Fannie Mae / Freddie Mac | Multifamily (5+ units) | 75-80% | Fixed |
| CMBS | Stabilized commercial, non-recourse | 70-75% | Fixed |
| Life Company | Class A assets, lowest rates | 60-65% | Fixed |
| Debt Fund | Transitional, higher leverage | 70-80% | Floating |
| SBA 504 | Owner-occupied properties | 85-90% | Fixed (CDC portion) |
Cash-Out Refinancing
One of the most powerful wealth-building tools in commercial real estate: accessing your equity without triggering a taxable sale.
How it works:
- Property is appraised at current market value
- New loan is sized at 65-75% of appraised value
- Existing debt is paid off
- You receive the difference as cash (minus closing costs)
Example:
- Current property value: $3,000,000
- Existing loan balance: $1,500,000
- New loan at 70% LTV: $2,100,000
- Cash to borrower: ~$600,000
Use cash-out proceeds for:
- Down payment on new acquisitions
- Property improvements and renovations
- Partner buyouts or capital returns
- Business operations or working capital
- Debt paydown on other properties
Tax advantage: Loan proceeds are not taxable income. You access your gains without the capital gains tax hit you'd face in a sale.
Rate-and-Term Refinancing
Not every refinance involves taking cash out. Sometimes the goal is simply better terms:
- Lower rate – Reduce your interest expense and improve cash flow
- Longer term – Push out maturity and eliminate balloon payment pressure
- Fixed vs. floating – Lock in predictable payments or gain flexibility
- Remove recourse – Transition from personal guarantees to non-recourse
Rate-and-term refinances typically have lower closing costs and may qualify for streamlined processing with some lenders.
When to Refinance
Ideal timing indicators:
- Loan maturity within 12-24 months
- Interest rates have declined since origination
- Property value has increased significantly
- NOI has improved (better DSCR = better terms)
- Current loan has prepayment flexibility
- You need capital for new investments
Potential obstacles:
- Prepayment penalties on existing loan (yield maintenance, defeasance)
- Property performance has declined
- Rising rate environment makes new debt more expensive
- Insufficient seasoning for cash-out (typically 6-12 months required)
We help you evaluate whether refinancing makes economic sense given your specific situation and existing loan terms.
Refinancing Process
Property and Loan Analysis
We review your current financing, property performance, and objectives to determine if refinancing makes sense—and which loan products fit best.
Lender Outreach
We solicit quotes from appropriate lenders based on property type, size, and borrower profile.
Term Sheet Comparison
Evaluate offers across rate, leverage, term, prepayment, and other key factors. We help you understand the true cost of each option.
Application and Underwriting
Prepare documentation and coordinate third-party reports (appraisal, environmental, property condition).
Closing
Close your new loan, pay off existing debt, and receive any cash-out proceeds.
Timeline: 30-60 days for bank and debt fund refinances; 45-75 days for agency and CMBS.
Refinancing Costs to Consider
Refinancing isn't free. Evaluate whether the benefits outweigh the costs:
New loan costs:
- Origination fee: 0.5-1.5% of loan amount
- Appraisal: $3,000-10,000+
- Legal fees: $5,000-15,000
- Title insurance: Varies by loan size
- Environmental/property reports: $3,000-7,000
Existing loan costs:
- Prepayment penalty (if applicable)
- Yield maintenance or defeasance (CMBS, agency)
Rule of thumb: If you're refinancing purely for rate improvement, ensure the savings exceed your closing costs within 2-3 years.
Property Types We Refinance
- Multifamily – Apartments, student housing, affordable housing
- Retail – Shopping centers, single-tenant, neighborhood retail
- Office – Suburban and urban office buildings
- Industrial – Warehouse, distribution, flex
- Mixed-Use – Retail/residential, office/residential
- Hospitality – Hotels, extended stay
- Self-Storage – Stabilized facilities
- Owner-Occupied – Business owner properties (SBA eligible)
Why Work With Brookmont
Multiple Capital Sources – We work across lender types—banks, agencies, CMBS, debt funds, SBA—ensuring you see the full range of options, not just one lender's product.
Objective Analysis – We help you determine whether refinancing makes sense economically, factoring in prepayment costs, rate environment, and your investment timeline.
Execution Experience – Refinancing requires coordination between existing and new lenders. We manage the process to ensure smooth execution and on-time closing.
Ongoing Partnership – Your financing needs evolve. We're here for future refinances, acquisitions, and capital events as your portfolio grows.
Ready to Evaluate Your Refinancing Options?
Whether you're approaching loan maturity, seeking cash-out, or simply want better terms, Brookmont Capital Ventures can help you explore your options and execute the right strategy.
Questions? Contact our team at info@brookmontcapital.net
Brookmont Capital Ventures is a capital advisory firm. We do not provide direct lending services. All financing is subject to lender approval and underwriting.