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Overview
What is Credit Tenant Lease Financing?
Credit Tenant Lease ("CTL") financing is a specialized capital solution in which a lender advances funds secured primarily by the contractual rental obligations of a creditworthy tenant—rather than the appraised value of the underlying real estate. Unlike conventional commercial mortgage lending—where loan proceeds are driven by property valuation—CTL financing is sized and based on the creditworthiness of the underlying tenant, the structure and duration of the lease, and underlying contractual rental payments.
PGIM’s Approach to CTL Financing
At PGIM, we provide long-term, fixed-rate financing for mission-critical assets and purpose-built facilities occupied by investment-grade corporate, government, and not-for-profit tenants. Our CTL financing approach combines the strengths of corporate credit analysis with real estate lending disciplines, resulting in a highly customized, long-term, fixed-rate loan with attractive leverage. This versatile structure can be tailored to a wide range of objectives, including construction-to-permanent financing, sale/leaseback transactions, property acquisitions, and the refinancing of existing debt through lease monetization.
Learn more about why New Balance chose to work with us to finance their new LEED-certified headquarters.
Who We Work With
Our Team
Caity McLaughlin, CFA
Executive Director, Credit Tenant Lease (“CTL”) Finance group
Elyssa McMullen
Managing Director, Credit Tenant Lease (“CTL”) Finance group
Greg Nail
Senior Director, Credit Tenant Lease (“CTL”) Finance group
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Understanding Credit Tenant Lease Financing
The typical financing size of PGIM’s Credit Tenant Lease financing ranges from $25 million to $100+ million, with up to 100% loan-to-value. Proceeds are calibrated based on present value of future rental obligations under the lease.
Collapse SectionCompanies can deploy proceeds from Credit Tenant Lease financing to fund new development, acquire strategic properties, or unlock liquidity from existing real estate holdings to support broader corporate or institutional priorities.
Collapse SectionFinancing can be provided as long-term, fixed-rate debt with maturities of 20+ years, customized amortization schedules, and loan terms aligned with the full lease term, helping reduce refinancing and interest rate risk. Structures can be tailored to meet specific tenant and borrower objectives, with select below-investment-grade tenant opportunities considered on a case-by-case basis.
Collapse SectionPGIM combines tailored structuring expertise, flexible capital solutions, and reliable execution to support complex Credit Tenant Lease financings. We can provide funding in local currencies, offer a single construction-to-permanent financing solution from groundbreaking through stabilization, and finance eligible transactions without requiring an agency rating. Our dedicated team is focused on delivering an efficient process and timely closing.
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