Office Property Loans

Commercial Real Estate Loans

Office Property Loans

Multifamily is the one property type with a financing advantage nothing else in commercial real estate can match: it’s the only asset class eligible for Fannie Mae and Freddie Mac agency financing. That access, combined with lower perceived risk, is why multifamily consistently sees higher leverage and lower rates than office, retail, or industrial properties of similar quality.

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At a Glance

Property Types	Single-tenant and multi-tenant office, medical office, professional office
Investor Financing	Conventional only - bank, CMBS, life company, bridge
Owner-Occupied Financing	Conventional, SBA 7(a), or SBA 504

Investment Property

Office is financed through conventional channels only when you’re buying as an investment – bank, life company, CMBS, or bridge, depending on the property’s class, tenancy, and your hold strategy. SBA financing isn’t available here, since SBA programs require the borrower’s own business to occupy the space.

What drives the underwriting:

Building class - Class A buildings (strong locations, modern amenities) command the best leverage, rates, and lender access. Class B and C properties face tighter underwriting and fewer willing lenders, a gap that's widened since the shift toward hybrid work
Weighted Average Lease Term (WALT) - the single most closely watched office metric; a rent roll with a WALT under 5 years typically faces sizing or pricing penalties, since it signals more near-term rollover risk
Medical office - underwritten more favorably than general office, thanks to longer leases and tenants who invest heavily in their own buildout (making them less likely to leave)
Tenant improvement & leasing commission reserves - office leasing is capital-intensive, and lenders increasingly require upfront reserves for future TI/LC costs to protect the deal's cash flow

What lenders look for:

Tenant credit quality - especially for tenants occupying significant space, paying a large share of total rent, or paying triple-net leases
Rent roll and T-12s - verifying actual income, lease terms, and rollover schedule
DSCR - typically 1.30x–1.45x, calculated against a stressed underwriting rate rather than the actual note rate
DSCR - typically 1.30x–1.45x, calculated against a stressed underwriting rate rather than the actual note rate

Owner-Occupied Property

If your business – including medical and professional practices – will operate out of the property, you have more paths to choose from than an investor does:

	Conventional	SBA 7(a)	SBA 504
Conventional / Bank Term	20%–30%+	10%	As low as 10%
Rate	Market, varies by lender	Floating, tied to WSJ Prime	Fixed for the full term
Prepayment Penalty	Varies by lender	5/3/1 declining schedule (real estate involved)	10-year declining schedule; must prepay in full
Best For	Strong financials, want lender flexibility	Real estate plus other business needs in one loan	Real estate/equipment only, want long-term rate certainty

SBA financing requires your business to occupy at least 51% of the building. For full program details, see SBA 7(a) Loans or SBA 504 Loans.

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Frequently Asked Questions

Can I get an SBA loan for an investment office property?

No – SBA financing requires your own business to occupy the property. Investor-owned office is financed through conventional, CMBS, life company, or bridge options instead.

Should I use SBA 7(a) or 504 for an owner-occupied office purchase?

504 is often the better fit if you only need the real estate and want a fixed rate for the full term. 7(a) offers more flexibility if you want to bundle the purchase with other business needs.

Why does building class (A, B, or C) matter for financing?

Class A buildings attract the best rates, highest leverage, and the widest range of lenders. Class B and C properties face progressively tighter underwriting and fewer available lenders.

What is WALT, and why does it matter for office financing?

WALT (Weighted Average Lease Term) measures how much lease term remains, weighted across the rent roll. A short WALT signals more near-term rollover risk, which can reduce how much a lender is willing to finance.

Is medical office easier to finance than general office?

Generally, yes – medical tenants tend to sign longer leases and invest heavily in their space, making them less likely to relocate, which lenders view favorably.

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