The Structure
How a $1.2M Owner-Occupied Commercial Building Loan Is Structured
One product, one building, three problems solved. The underwriting read the manufacturer’s combined revenue across all three locations as a single operating company — because it was one — and the new building as owner-occupied collateral. That is what supported a low down payment on a purchase that replaced three lease payments with one note, and three landlords’ renewal calendars with none.
Three leases, three landlords, and a line that lived on a truck. One owner-occupied note put it under one roof in 30 days
Representative structure
Larger consolidations fund the same way when revenue, cash flow, and story qualify.
The Transaction
What the Manufacturer Was Consolidating
Bobby Friel
Founder, Basecamp Funding
Nobody plans to run a factory across three buildings. It happens one lease at a time — assembly outgrows the shop, storage outgrows assembly — until a forklift ride across a parking lot is part of the production process and everyone has stopped noticing.
A manufacturer had grown into three separate leased spaces across town — machining in one, assembly in another, finished-goods storage in a third — with forklifts and box trucks shuttling work between them every day. Three leases, three landlords, three renewal dates, and a production line that lived on a truck. The desk structured owner-occupied real estate financing at low down on a 40,000 sq ft production building big enough for all of it. Funded in 30 days. Three leases became one note, the shuttle went away, and the floor space that had been hallways and loading docks became capacity.
Underwriting
How a Commercial Building Loan for a Consolidation Actually Works
The building secures the loan, and the combined operation services it. The underwriting question for a consolidation is not whether one location can afford a building — it is whether the whole company can, and a manufacturer paying three rents already had the answer in its bank statements.
The Bank
What a bank underwrites.
A commercial property purchase, on its standard track, at a conservative loan-to-value. It sees three small leases and a $1.2M building and asks why the business needs to own something three times the size of any space it currently occupies. The consolidation logic — that three spaces equal one — is not on the form.
This Structure
What owner-occupied financing underwrites.
One operating company with revenue documented across three addresses, three rent payments that together exceed the new note, and a building it will occupy in full. Repayment comes from cash flow the business already spends on rent. The lender is underwriting a company that gets cheaper to run the day it closes.
Why Three Rents Already Paid for One Building
Search for a commercial building loan and most of what comes back is about qualifying for a purchase. The consolidation case is simpler than that: the manufacturer was already paying for 40,000 square feet — it was just paying three landlords for it, in three pieces, with hallways, loading docks, and duplicate break rooms in each. Combined, the three lease payments exceeded the purchase payment at a low down payment. The business was not taking on a new cost. It was replacing three costs with a smaller one that builds equity.
The Cost That Never Showed Up on a Lease
A forklift and a box truck moving work-in-process between buildings every day is labor, fuel, damage, and — the expensive part — time. Machined parts waiting on a truck are inventory that isn’t assembling. Finished goods in a third building are an extra handling step on every shipment. None of that appears on a rent invoice, and all of it went away the day the line ran end to end under one roof. The consolidation paid for itself in throughput before the first note payment was due.
Why the Down Payment Stayed Low
An owner-occupied purchase is underwritten against the building and the business that will run in it. With three addresses of production history and a rent burden that already exceeded the new payment, the lender was holding strong collateral and a borrower whose cash flow improved at close. That supports roughly 10% down where a bank on its standard track would want 25% to 30% — the difference being money the manufacturer needed for rigging and moving three floors into one.
What Thirty Days Actually Required
A commercial close has fixed steps: appraisal, title, a Phase I environmental on an industrial building, survey. Thirty days was those steps run in parallel with a file ready before the clock started — twelve months of bank statements, all three current leases with their expiration dates, the purchase contract, and the building identified. The lenders were never the bottleneck. Coordinating three lease exits around one closing date was.
What One Roof Actually Buys
Capacity, first. Square footage that had been three sets of hallways and docks became production floor. The line runs end to end without a truck in the middle, which is lead time customers can see. And the company now owns the building production depends on — an asset that appreciates, that can be refinanced when the business needs capital, and that a buyer of the business will pay for. Three landlords no longer have a vote in when, or whether, the manufacturer moves.
Run the arithmetic your own way: add up your rents, add the hours your crew spends moving work between buildings, and compare that to one note on a building you own.
For most manufacturers running split operations, the answer is that consolidation was cheaper than the status quo before the equity was counted. That is a different question than whether a bank understands why you need a bigger building than any of your current ones.
The Products
The Products That Funded This Transaction
| Product | Role here |
|---|---|
| Commercial Real Estate → | One production building, underwritten as owner-occupied against the combined operation’s revenue |
Financing this whole sector: Manufacturing Financing →
The Result
What Changed After Close
Start Here
See What Consolidating Under One Roof Looks Like
Sixty seconds, no documents, and a soft-pull review. If you’re running production across more than one lease and want to know what one owned building actually costs against all of them, this is where that starts.
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Related
Similar Structures
Representative scenarios — illustrative, anonymized figures, not specific client transactions.
FAQ
Commercial Building Loans for Consolidating Operations — Questions, Answered
Can you get a commercial building loan to consolidate several leased locations?
Yes, as an owner-occupied commercial real estate purchase. The underwriting reads the whole company — revenue across every current address and the combined rent it already pays — and the new building as collateral the business will occupy in full. When the existing rents together exceed the new payment, the loan is replacing costs, not adding one, and that is a strong file.
Why does a bank struggle with a consolidation purchase?
Because the form asks why the business needs a building three times the size of any space it currently occupies, and the answer — three spaces equal one — isn’t a field. A bank on its standard commercial real estate track also applies a conservative loan-to-value and a 60-to-90-day timeline that rarely lines up with three lease expirations.
How much do you need down to buy a building for your business?
As an owner-occupied purchase, typically around 10% when revenue and deposit history support it — versus 25% to 30% on a bank’s standard track. For a consolidation, that difference is usually the money needed to rig and move equipment from several floors into one.
Is buying one building cheaper than leasing several?
Add your current rents together and compare to the purchase payment at a low down payment on the square footage you actually need. For this manufacturer, three leases exceeded one note. Then add what the leases never showed: labor, fuel, handling, and lead time spent moving work between buildings. Consolidation usually pays for itself in throughput before equity is counted.
Can you consolidate into an owned building without an SBA 504 loan?
Yes. The 504 program is one route to an owner-occupied purchase; its timeline and two-lender structure are the usual friction, and coordinating that with several lease exits is difficult. A conventional owner-occupied structure underwrites on the same basis and can close in about a month when the file is ready. The trade-offs are real, and a specialist should walk you through both before you commit to either.
How long does it take to close on a production building?
A commercial close has fixed steps — appraisal, title, environmental, survey — so weeks, not days. Thirty days is fast. It required a file ready before the clock started: twelve months of bank statements, every current lease with its expiration date, the purchase contract, and the building identified. The hard part was lining up three lease exits around one closing, not the lenders.
What does consolidating operations actually change?
The production line runs end to end without a truck in the middle, which customers see as lead time. Square footage that was hallways and loading docks in three buildings becomes production floor in one. And the business owns the building it depends on — no renewal negotiations, no landlord deciding to sell, and an asset that can be refinanced or sold with the company.
