Austin commercial property is priced on growth stories, but it is financed on the income it collects today. That gap between what a building could earn and what it earns now is where most Austin commercial loan requests are won or lost.
In short: LendingStreet makes investor commercial real estate loans across the Austin metro on 9+ unit apartments, mixed-use, retail, office, flex and light industrial, and self-storage, with custom terms up to $5M+. Loans are sized on the property's net operating income, debt service coverage ratio and loan-to-value, with up to 75% LTV on acquisitions. Our investor loans are business-purpose loans on non-owner-occupied property.
Commercial, for our purposes, means income property that is not a 1-8 unit rental: apartment buildings with nine or more units, mixed-use buildings, retail centers and strips, small office, flex and light industrial, self-storage and similar property that produces rent from tenants. If you own or are buying a duplex, fourplex or a 5-8 unit building, that is a residential loan, and our Austin DSCR and 5-8 unit pages are the better starting place.
Across Travis, Williamson and Hays counties, the deals we see tend to fall into a few clear groups, and each one gets underwritten a little differently.
| Property type | Where it shows up in the metro | What underwriting focuses on |
|---|---|---|
| 9+ unit multifamily | East Riverside, North Lamar, South Austin, West Campus, Round Rock | Rent roll, trailing operating statements, concessions |
| Mixed-use | East 6th, South Congress, Burnet Road, Manor Road | Blended NOI, commercial lease terms |
| Retail strips | Arterials across North Austin, Pflugerville, Cedar Park | Tenant mix, lease expirations, rollover |
| Flex and light industrial | SH 130, US 183 and Parmer Lane corridors | Lease terms, tenant credit, clear height and access |
| Self-storage | Suburban growth areas such as Leander, Kyle, Hutto | Occupancy history, street rates, operating history |
| Small office | Suburban office parks, converted buildings near downtown | Vacancy, lease length, tenant improvement needs |
A commercial loan starts with net operating income: collected rent and other income, minus vacancy and operating expenses, before debt service. We then size the loan two ways and use the lower answer. The first is loan-to-value, up to 75% on acquisitions, with maximum leverage varying by program, property type and balance. The second is debt service coverage, the ratio of NOI to the estimated annual debt service on the new loan.
In Austin, the coverage test is usually the one that binds. Prices have been set by buyers expecting rent growth, while lenders size on the income the property actually produces. The property must be cash-flow positive, and permanent loans want stabilized income behind them.
This example is illustrative and not a quote. An investor is buying a three-tenant flex building off the SH 130 corridor for an assumed value of $2,400,000. Leases bring in $252,000 a year, and the underwriting applies a 7% vacancy and credit loss assumption. After taxes, insurance, repairs, management and reserves, NOI is $181,860.
At 70% LTV the loan is $1,680,000, with estimated annual debt service of $145,718. That produces a DSCR of about 1.25x, which clears a typical commercial coverage target. At 75% LTV the coverage would be thinner, so the investor brings more equity rather than stretching.
| Line | Amount |
|---|---|
| Gross scheduled rent | $252,000 |
| Vacancy and credit loss (assumed) | -$17,640 |
| Effective gross income | $234,360 |
| Property taxes (assumed) | -$34,000 |
| Insurance (assumed) | -$9,500 |
| Repairs, management and reserves (assumed) | -$9,000 |
| Net operating income (NOI) | $181,860 |
| Value (assumed) | $2,400,000 |
| Loan amount at 70% LTV | $1,680,000 |
| Estimated annual debt service | $145,718 |
| DSCR | 1.25x |
Location changes the questions we ask. A mixed-use building on East 6th or South Congress is underwritten on the strength of its ground-floor tenants and how its apartments compete. An older garden complex along East Riverside or North Lamar is underwritten on in-place rents, deferred maintenance and how much it has to compete with newer buildings nearby.
North of the river, the Domain area has pulled office and retail demand to North Austin, while suburbs such as Round Rock, Pflugerville, Cedar Park, Georgetown, Kyle and Buda have added retail, flex and storage to serve fast-growing neighborhoods. Large employers along the eastern edge of the metro, including manufacturing near SH 130 and in Taylor, have drawn industrial and flex users. None of that replaces the rent roll, but it shapes how we read it.
Texas has no state income tax, so local property taxes carry much of the load. Rates are set by local taxing units, and values are set each year by the Travis, Williamson or Hays central appraisal district. A purchase usually resets the appraised value toward your price, so a seller's tax bill is rarely the right number for your underwriting. Owners can protest appraised values every year; confirm current figures with the appraisal district.
Insurance is the other big line. Central Texas sees hail and severe storms, and parts of the metro sit near flood-prone creeks such as Shoal Creek, Onion Creek and Walnut Creek. Get a current quote and a flood determination early, because both feed directly into NOI.
Texas is a non-disclosure state, so sale prices are not public record. Appraisers rely on the comps they can verify, and that can make valuing a unique Austin building harder than in states where every price is published. A commercial loan needs a full valuation, so plan time for it and share any comps, listings or offers you have.
Commercial loans take longer than residential ones. A valuation, rent roll and lease review, and often environmental and property condition reports are common parts of the process. Having the file complete up front is the single best way to keep it moving.
Borrower experience, liquidity and the property's operating history all matter, and LLC and other entity borrowers are standard. Recourse varies by program, and terms are set deal by deal. If the property needs repositioning before it can carry a permanent loan, a commercial bridge loan may be the right first step.
Send the address, price or value, rent roll and your goals using the form below, or call (877) 298-1001. We will tell you plainly whether the numbers support the loan you want and what would change the answer.
Apartment buildings with nine or more units, mixed-use, retail, office, flex and light industrial, self-storage and similar income property. Properties with 1-8 units are financed as residential rentals.
Loans go up to $5M+ with custom terms. Acquisitions go up to 75% LTV, and the final size is the lower of what LTV and DSCR support.
Usually because the price reflects expected growth while the loan is sized on current NOI. Higher taxes after a sale and insurance quotes can also lower NOI.
Yes. We lend across the Austin metro, including Williamson and Hays counties, as long as the property is investor-owned income property.
Longer than a residential loan. Valuation, lease review and environmental or property condition reports add time, and a complete file up front helps most.
No. Our investor loans are business-purpose loans on non-owner-occupied property. The property needs to be leased to tenants.
For a permanent loan, it should be stabilized and cash-flow positive. A property in lease-up or renovation is usually a better fit for a commercial bridge loan first.
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