Where different NNN property types sit in the Moderate lending environment.
Conservative leverage with strong equity cushion. All lender types active.
Typical market leverage for investment-grade tenants. Banks and insurance compete.
Higher leverage requiring stronger DSCR. Selective bank and debt fund territory.
Aggressive leverage with limited lender appetite. Mezzanine or bridge only.
Which capital sources are active at each leverage level.
Average CRE LTV has compressed from ~80% in 2021 to 65-68% in 2025. Rate environment and bank regulatory pressure are primary drivers.
Investment-grade tenants (S&P BBB+ or higher) command 70%+ LTV. Sub-IG tenants are typically capped at 55-60% max leverage.
Grocery-anchored NNN achieves 70-72% LTV. QSR nets 63-65%. Short-lease or single-tenant office is stuck at 50-55%.
Higher leverage demands higher coverage. At 70% LTV, expect 1.25x DSCR minimum. At 55% LTV, 1.15x may suffice.
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LTV and lending standard data is for educational purposes only and should not be relied upon for investment or lending decisions. Actual underwriting standards vary significantly by lender, deal structure, and market conditions. Always consult with your lending team and verify current requirements before submitting loan applications.