Acquisitions
Financing the purchase of an industrial property
Whether your business is moving into its own building or you're acquiring a leased industrial asset, the financing should be planned before the offer goes firm.
Two very different purchase files
Owner-occupied purchases
When your operating company will occupy the building, lenders underwrite the business and the real estate together. They want to see that the company's cash flow can support the new mortgage payments in place of the rent it pays today, and that the building itself is marketable if circumstances change. Business financial statements, the length and stability of operations, and the industry you're in all carry weight.
Investment (leased) purchases
When the building is leased to third-party tenants, the lender's attention shifts to the income stream: the rent roll, lease expiries, who pays operating costs and taxes, renewal options, and the covenant strength of each tenant. The purchaser's experience, net worth and liquidity also matter, particularly for larger or multi-tenant buildings.
The purchase financing process
- 01
Initial review
Discuss the property, intended use, purchase price, your down payment and closing timeline. We look at the file the way a lender would and flag likely questions early. - 02
Structure & conditions
Consider borrowing entity, guarantors and the type of lender suited to the file. Discuss with your lawyer and real estate professional how much time the financing and due-diligence conditions in your offer should realistically allow. - 03
Package the file
Assemble financial statements, leases, property information and a clear summary that explains the deal, the borrower and the property's strengths and risks. - 04
Lender presentation
Present the file to suitable lenders, banks, credit unions, institutional lenders or alternative lenders as appropriate, and gather indicative terms. - 05
Term sheet / commitment
Review the terms offered, including conditions, fees, prepayment provisions and reporting covenants, and decide which offer to accept. - 06
Third-party reports
Lenders commonly require an appraisal, an environmental site assessment and sometimes a building condition assessment. These are ordered once a lender is selected. - 07
Conditions satisfied & funding
Remaining lender conditions are cleared, your lawyer completes the mortgage documentation, and funds are advanced on closing.
What strengthens a purchase file
- Realistic timelines in the purchase agreement for financing and due diligence.
- Complete, organized financials: lenders move faster when they aren't chasing documents.
- Property information up front: clear height, loading, power, site area, zoning and any known environmental history.
- For investments, full leases rather than summaries, including amendments and renewal terms.
- A clear explanation of anything unusual, a vacancy, a specialized use, a recent incorporation.
Learn more about how lenders evaluate these factors in How Industrial Property Financing Works, or see common questions in the FAQ.
All financing is subject to lender underwriting and approval. No approval, rate, amount or timeline is guaranteed.
Consultation
Planning an industrial acquisition?
Share the property, the timeline and what you're trying to achieve. You'll get a straightforward conversation about how lenders are likely to look at it and what to prepare.