Financing the Future of Commerce: Specialized Capital for Retail & Mixed-Use Properties

Your direct line to over 1,800 lenders. We secure competitive financing for grocery-anchored centers, value-add repositioning, experiential destinations, and complex mixed-use developments.

Capitalizing on the Evolving Retail and Mixed-Use Landscape

The narrative of a "retail apocalypse" is outdated. In 2025, the retail and mixed-use sector is demonstrating remarkable resilience, driven by a strategic evolution in how consumers shop, live, and interact with commercial spaces.^[1] Despite macroeconomic headwinds like elevated interest rates and operating costs, the market is defined by two powerful, counterbalancing forces.^[3]

First is the dominance of necessity and value. Grocery-anchored and necessity-based centers continue to outperform, attracting strong lender appetite due to their stable, non-discretionary consumer demand and recession-resistant characteristics.^[5] Lenders view these assets as lower-risk collateral, making them a top choice for permanent financing and refinancing.^[7] Second is the rise of the experience economy. A fundamental consumer shift towards "retailtainment" is creating new opportunities for investors. Retailers are optimizing existing spaces to offer unique, immersive experiences, driving demand for non-traditional tenants like fitness centers, entertainment venues, med-spas, and pickleball courts.^[8]

This evolution creates a complex financing environment. The market is no longer a monolith but a bifurcated landscape. Lender appetite is strong but highly concentrated on assets that are either demonstrably safe (necessity-based) or uniquely compelling (experiential). This creates a significant "capital gap" for properties that fall in the middle—older, unanchored centers with traditional tenants that lack a clear, defensible market position. Traditional lenders may struggle to underwrite emerging experiential concepts, while a constrained supply of new construction makes prime, stabilized assets highly competitive.^[9] Success in this environment requires a capital partner who understands this nuance and can access a diverse spectrum of lenders.

This is where Clear House Lending provides a decisive advantage. We don't just find a loan; we engineer a capital solution. Our network of over 1,800 lenders includes specialists in every niche of the retail and mixed-use market, from institutional banks funding stabilized NNN assets to private debt funds financing ambitious value-add projects. This guide will provide the expert insights needed to navigate this market and secure the optimal financing for your strategy.

The Modern Underwriting Playbook: How Lenders Evaluate Retail and Mixed-Use Assets in 2025

Securing retail or mixed-use financing is less about an investor's personal credit score and more about the property's ability to generate sustainable cash flow. Lenders perform a forensic, forward-looking analysis of the asset's underlying health to predict its future performance. Understanding their playbook is the first step to a successful funding outcome.^[11]

Pillar 1: The Tenant Ecosystem and Lease Structure - The Bedrock of Value

Lenders begin their analysis with the property's income source: the tenants. They analyze the tenant roster not as a list, but as an ecosystem. A well-curated mix of complementary businesses creates synergy, driving foot traffic and increasing sales for all tenants, which in turn stabilizes the property's income stream and enhances its market value.^[12] Lenders will heavily scrutinize the creditworthiness of anchor tenants, as they are critical to a center's financial success and ability to attract other tenants.^[14]

The rent roll is the property's DNA. Lenders examine lease terms, expiration schedules, and rental rates in detail.^[16] A key focus is on staggered lease expirations to avoid the risk of mass vacancy and income loss in a single year. Within this analysis, lenders strongly prefer Triple Net (NNN) leases, where the tenant is responsible for property taxes, insurance, and common area maintenance.^[18] This structure creates a highly predictable, passive income stream for the landlord, insulating the Net Operating Income (NOI) from expense volatility and making the property's cash flow easier to underwrite.^[19]

Finally, lenders will carefully review any co-tenancy clauses. These provisions, which allow a tenant to reduce rent or terminate their lease if an anchor tenant leaves or overall occupancy drops below a certain threshold, are a major red flag for lenders.^[20] They can create a "domino effect" of financial distress, and a property with unfavorable co-tenancy clauses may face more restrictive loan terms or outright rejection.^[21]

Pillar 2: Property Performance and Location Intelligence - Gauging Market Health

Once the lease structure is understood, lenders assess the real-world performance of the tenants and the location. Tenant Sales Per Square Foot (PSF) is a critical health metric, and many retail leases require tenants to report these figures annually.^[23] Strong or rising sales PSF indicate a healthy tenant and a desirable location, increasing the likelihood of lease renewal and reducing rollover risk.^[24] Lenders compare a tenant's sales to industry benchmarks to assess performance and viability.^[25]

Closely related is the Occupancy Cost Ratio, calculated as a tenant's total occupancy cost (rent plus reimbursements) divided by their gross sales.^[23] This ratio reveals how sustainable the rent is for the tenant. A high occupancy cost ratio suggests the tenant may be overpaying relative to their sales volume and could be a flight risk at renewal, a key concern for lenders.^[23]

Beyond the property itself, lenders analyze the location's long-term viability. They assess demographic data such as population growth, household income, and traffic counts, as well as the competitive landscape, to determine the health of the surrounding trade area.^[11] A strong location in a growing market can help mitigate other property-specific risks.

Pillar 3: The Financials and The Sponsor - Quantifying the Risk

With a clear picture of the property's operational health, lenders apply quantitative tests to structure the loan. The Debt Service Coverage Ratio (DSCR) is the most important metric, measuring the property's annual NOI against its total annual debt payments. For retail properties, lenders require a minimum DSCR of 1.25x, with some requiring up to 1.40x for assets with perceived higher risk, ensuring a sufficient cash flow buffer.^[26]

The Loan-to-Value (LTV) ratio measures the loan amount against the property's appraised value. For retail, lenders are typically conservative, with maximum LTVs ranging from 65% to 75%.^[28] A lower LTV signifies more borrower equity ("skin in the game"), which reduces the lender's risk. While the property is the primary focus, the borrower's experience is also crucial. A sponsor with a proven track record of successfully operating similar retail properties provides lenders with confidence in their ability to execute the business plan and navigate future challenges.^[30]

The Mixed-Use Underwriting Challenge

Mixed-use properties are inherently more complex to finance because they involve underwriting two or more distinct asset classes within a single structure.^[32] Lenders must analyze bifurcated income streams, as the residential and commercial components have different risk profiles, lease terms, and market drivers.^[33] The project must also be legally subdivided, either through a condominium structure governed by CC&Rs or a vertical airspace subdivision governed by a Reciprocal Easement Agreement (REA). Lenders will scrutinize these documents to understand cost-sharing, management responsibilities, and use restrictions.^[32] Furthermore, because commercial tenant rollover is far more expensive than residential turnover due to the high cost of Tenant Improvements (TIs) and leasing commissions, lenders will require larger capital reserves for mixed-use properties to account for this risk.^[14]

A Solution for Every Strategy: Tailored Loan Programs for Your Retail Asset

The modern retail market demands more than a one-size-fits-all loan. Whether you're acquiring a stabilized, cash-flowing asset or repositioning a vacant big-box store, our network provides access to the precise capital tool for the job.

For Value-Add and Repositioning: Bridge and Transitional Loans

Bridge loans are the ideal tool for properties that do not yet qualify for permanent financing. This includes acquiring centers with high vacancy, funding major renovations and Tenant Improvements (TIs), or needing time to execute a lease-up strategy and stabilize the asset.^[34] These are short-term (1-3 year), interest-only loans based on the property's future "as-stabilized" value.^[36] Lenders provide capital for both the acquisition and the renovation budget, often holding back construction funds to be released as work progresses.^[37] The primary advantage is speed and flexibility. Bridge loans can close in weeks, not months, allowing you to seize time-sensitive opportunities. Underwriting is asset-focused, making them perfect for properties traditional banks would reject.^[38] The goal is to use this short-term capital to create value and then refinance into a cheaper, long-term loan.

For Stabilized Properties: Permanent and Long-Term Debt

For stabilized properties, typically with 90% or higher occupancy, the goal is to secure long-term (5, 7, or 10-year) fixed-rate financing for acquisition or refinancing.^[27] Our network provides access to several key sources:

• Conventional Banks: Offer competitive rates for strong sponsors with well-located, high-quality assets.^[39]
• CMBS (Conduit) Loans: An excellent option for non-recourse financing. These loans are pooled together and sold as securities, resulting in competitive fixed rates and standardized terms. They are ideal for investors seeking leverage up to 75% LTV without personal guarantees, provided the property meets a minimum DSCR of 1.25x.^[29]
• Life Insurance Companies: The most conservative lenders, offering the lowest rates for the absolute highest-quality, "trophy" assets with long-term leases to credit tenants.^[27]

For Experiential and Niche Concepts: Private and Alternative Capital

Financing properties with non-traditional or "experiential" tenants—such as entertainment venues, boutique fitness centers, or pop-up shops—can be challenging for traditional lenders due to a lack of comparable data or proven financial history.^[41] Private lenders and hard money specialists in our network fill this void. They focus on the asset's intrinsic value, location, and the sponsor's vision.^[43] They provide asset-based loans that prioritize the real estate over tenant credit history, offering the flexibility needed to fund innovative retail concepts. While rates are higher, this capital is often the only way to finance the future of retail.^[38]

The Clear House Lending Advantage: A Network Engineered for Retail Success

Don't Just Find a Lender. Create a Competitive Marketplace for Your Loan.

In a fragmented lending market, approaching a single bank is a recipe for leaving money on the table. We invert the model. By bringing your loan request to our curated network of over 1,800 lenders, we create a competitive marketplace that drives down rates and improves terms, ensuring you receive the most optimal financing available.^[44]

• Access to Niche Specialists: Our network isn't just large; it's deep. We have lenders who only finance grocery-anchored centers, specialists in mixed-use development, and private funds dedicated to experiential retail. We match your project to the lender whose expertise ensures the highest likelihood of approval.
• Certainty of Execution: In commercial real estate, a slow "maybe" from a bank can kill a deal. Our private and bridge lenders can provide term sheets in days and close in weeks, giving you the confidence to negotiate and win competitive bids.^[44]
• Creative Structuring for Complex Deals: Mixed-use properties, value-add repositioning, and assets with high vacancy require more than a standard loan. Our network excels at creative solutions, including future funding facilities for TIs and capital improvements, and structuring loans around a property's future potential, not just its past performance.^[27]
• Funding for Projects Banks Decline: If your property has significant vacancy, a non-traditional anchor tenant, or you're a first-time commercial investor, many banks will say "no".^[35] Our network looks for reasons to say "yes," focusing on the quality of the asset and the viability of your business plan.

Conclusion: Build Your Retail Portfolio with a Strategic Capital Partner

The retail and mixed-use landscape of 2025 offers tremendous opportunity for investors who can navigate its complexities. Success is no longer just about finding the right property; it's about securing the right capital structure. The right financing partner is a strategic advantage. They provide the speed to win deals, the flexibility to execute complex business plans, and the certainty to build your portfolio with confidence.

You don't have to navigate the private lending market alone. Connect with a Clear House Lending Retail & Mixed-Use Loan Specialist today and get your project funded.

Frequently Asked Questions (FAQs)

1. What are the typical DSCR and LTV requirements for retail financing in 2025?

For stabilized retail properties, most lenders require a minimum Debt Service Coverage Ratio (DSCR) of 1.25x. For assets perceived as higher risk, like unanchored strip centers, this can increase to 1.40x.^[26] Loan-to-Value (LTV) ratios are typically capped at 75% for CMBS and some bank loans, with more conservative lenders like life insurance companies often staying below 65%.^[28]

2. How can I secure financing for a shopping center with significant vacancy?

Properties with high vacancy (typically below 90% occupancy) are considered "unstabilized" and will not qualify for traditional permanent financing.^[35] The primary solution is a commercial bridge loan.^[34] Our network of private lenders specializes in these situations. They underwrite the loan based on the property's potential "as-stabilized" value, providing funds for both the acquisition and the capital needed for renovations and tenant improvements to attract new leases.^[37]

3. What makes underwriting a mixed-use property more complex?

Underwriting mixed-use properties is complex because lenders must evaluate two distinct income streams—commercial and residential—within one asset.^[32] They analyze the synergy (or potential conflict) between the uses, scrutinize the legal documents (like REAs or CC&Rs) that govern the property, and typically require higher cash reserves to cover the significant costs of commercial tenant turnover (TIs and leasing commissions), which are much higher than for residential units.^[14]

4. How is a Tenant Improvement (TI) allowance typically funded in a commercial loan?

A Tenant Improvement (TI) allowance is a sum of money a landlord provides a tenant for renovations.^[45] For value-add projects using a bridge loan, the TI budget is often included in the loan itself as a "future funding" or "holdback" facility, with funds disbursed in draws as construction milestones are met.^[46] For permanent loans on stabilized properties, lenders may establish a TI and Leasing Commission reserve, holding back a portion of the loan proceeds to be disbursed as new leases are signed.^[47]

5. Why use Clear House Lending instead of going directly to a private lender?

Access and leverage. Finding the right private lender for your specific project is difficult and time-consuming. Our network gives you immediate access to hundreds of pre-screened, vetted commercial lenders who compete for your business. This competition drives down rates and fees, ensuring you get the best possible terms without having to shop your deal all over town. We match your deal's unique characteristics to the lenders most likely to fund it, saving you time and dramatically increasing your certainty of closing.^[44]