I’m an investor in a real estate syndication of a commercial retail property. If the general partner does not get an acceptable arm’s length offer on the building, then he’s likely to offer it to the investors in exchange for giving up his sponsor fee, but requiring us to take out a new mortgage without the him.
I know most commercial lenders require any owner with 20%+ interest in a project to personally guarantee the mortgage.
Here’s my question: If I own 19.95% of the project, will a lender require my PG on a commercial mortgage?
Will I need to sign mortgage?
byu/Hamachiman inrealestateinvesting
Posted by Hamachiman
1 Comment
Most lenders will check if you’re close to that 20% threshold and might still require PG even at 19.95%. They look at the ownership structure pretty carefully and some have internal policies about anyone holding significant stake regardless of being just under 20%.
You should probably ask what happens if other investors drop out too – your percentage could bump up automatically and then you’d definitely be in PG territory. The lender will want to see the full investor list and ownership breakdown anyway.