Borrowers may seek to eliminate the risk of rising interest rates by locking in today's rate prior to the completion of contructions of a single-tenant property. CapLease will lock a rate and write a forward commitment for a loan's funding up to 18 months in the future.   

What is required to obtain a rate lock or forward commitment?
Prior to the issuance of a rate lock and/or a forward commitment, CapLease must review a copy of the lease to determine if it is financeable under its CTL loan programs. In addition, a clean Phase I environmental report is generally required.
 
If the credit tenant lease qualifies for either a long-term CTL Loan or a 10-year CTL Loan, a forward commitment with specified rate lock provisions will be sent to the borrower. The interest rate will be locked upon receipt of the signed commitment documents and a refundable deposit. Forward rate locks are priced on a cost pass-through basis.
 
A loan for which CapLease has given a forward commitment will be funded upon:  

• Completion of agreed-upon due diligence and loan documentation;
• Receipt of a tenant estoppel confirming the lease terms; and
• Confirmation that the building is built to the tenant's specifications and is accepted by the tenant within the agreed-upon time frame.