Equipment and Tenant Improvement Financing
Corporations, for profit and not for profit entities (higher education and healthcare) as well as real estate owners, users, and operators are able to finance their needs based on credit and/or collateral considerations.
Equipment and Tenant Improvement Financing
Mesirow has realized the increasing need and demand for Equipment and TI financing. This has become particularly relevant given the retrenchment of traditional market participants such as regional banks. Mesirow maintains a unique platform to fill this void in that it can provide up to 100% financing for situations involving investment grade users and up to ~75% of valuations when high value collateral assets are involved.
tenant/credit
The product may be applied to situations with both investment grade and/or “credit-worthy” tenants or non-investment grade tenancy
Lease/Contract Type
Typically, bondable net
Note Term
Typically, 5 – 15 years but could be longer. The note terms are typically aligned with the remaining term of the underlying contract or the useful life of the collateral
Amortization
Typically, coterminous with the term of the Note and underlying lease/contract although various amortization/balloon structures may also be considered
Recourse
Non-Recourse Carveouts, only to the issuer of the Note
LTV/LTC
Up to 100% (assuming underlying credit worthy profile)
50% - 75%* (assuming a collateral-based structure)
DSCR
Typically, 1.00x – 1.05x
Transaction Rating
Typically, non-rated although rating agencies are involved in certain instances
Asset/Collateral Type
Any
Financing Instrument
Typically, structured as either taxable 4(a)(2) private placements or 144a private placements
Products & Contract Types
Equipment finance and leasing
Tenant improvement financing
Furniture and fixtures financing
Sale-leasebacks
Lease purchase agreements
Installment sales contracts
Taxable/tax exempt municipal lease purchase agreements
Energy savings contracts
Services agreements
Facility agreement
Asset & Collateral Types
Healthcare and medical equipment
Manufacturing equipment
Sports and athletic facilities
Park district facilities
General tenant improvements (all real estate types)
Furniture and fixtures
Technology and data center equipment
HVAC
Lighting
Industrial equipment
Public sector assets (e.g. vehicles performing public sector functions)
Chillers, boilers, central utility plants
Vehicles of any type
Aircraft
Sector Concentrations
Corporate
Healthcare
Higher-education (public and private)
Not-for-profit
Government (federal, state, local, special districts, component units of government)
Public Private Partnership (P3)
Hospitality
Retail
Professional and amateur sports
Non-Investment Grade (High-Yield) credits
High-Yield credits will be considered on a case-by-case basis taking into consideration the underlying credit as well as the collateral value of the equipment.
- Distribution
- Complimentary business units within the firm
- Residual Note capabilities
- Ability to provide liquidity / Balance Sheet access when needed
- Access to in-house research, sales, trading
Can you have a balloon at the end of a equipment/tenant improvement financing?
Yes, provided it’s protected with either appropriate credit support and/or certain collateral considerations.
What are the typical note terms of a quipment/tenant improvement financing?
Typically, the note terms range from 10 to 15 years but any term may be accommodated depending on the facts and circumstances.
Are these types of financings secured?
Yes, they are typically secured/collateralized with the respective equipment and/or personal property via UCC filings. Leasehold mortgages may be provided as well in certain instances.
Can the collateral be used as primary underwriting criteria?
Yes, these financings can be priced, treated, and structured off either credit and/or collateral considerations.
