Commercial Tenant Credit Analysis, Balance Sheet Auditing, and Corporate Guarantees

1. Investment-Grade Corporate Credit

Nationally recognized corporations with investment-grade ratings from S&P, Moody's, or Fitch (e.g., Walgreens, CVS, Amazon, FedEx). Lenders offer maximum leverage (70%–75%), 25 to 30-year amortizations, and highly competitive interest rates on properties secured by long-term investment-grade leases.

2. Unrated National & Regional Tenants

Large operating entities without public debt ratings. Underwriters analyze 3 years of audited balance sheets, cash flow statements, and company-wide debt obligations to establish an internal "shadow rating."

3. Local & Franchisee Commercial Tenants

Local businesses and franchisee operators. Underwriters review store-level unit economics, local market competition, operator net worth, and personal guarantor balance sheets.

Critical Retail Underwriting Ratios

• Rent-to-Sales Ratio: Total annual rent divided by gross store sales. If rent exceeds 10% to 12% of sales, the tenant faces heightened margin pressure and risk of non-renewal.
• Store-Level EBITDAR Coverage: Operating earnings before interest, taxes, depreciation, amortization, and rent divided by contract rent. Lenders prefer a minimum 2.50x store-level coverage ratio.
• Unit Economics Trajectory: Underwriters require 3-year store sales trends to ensure store revenues are expanding rather than decaying.