The Dallas commercial deals most individual investors buy are not office towers. They are a four-bay strip on a busy arterial, a small office building off the LBJ Freeway, a few flex bays near the Stemmons corridor or a self-storage facility on the edge of the county. Those buildings fall in the small-balance range, and they are underwritten with a closer look at each tenant.
In short: LendingStreet offers small-balance commercial loans of roughly $500K to $5M for Dallas investors buying or refinancing small retail strips, office buildings, flex and light industrial space, self-storage and mixed-use buildings. Loans are sized on NOI, DSCR and LTV, with up to 75% LTV on acquisitions and custom terms set per deal. Because a small building may have only a handful of tenants, lease terms, tenant quality and your own experience and liquidity matter a great deal.
Small-balance commercial covers loans from roughly $500K to $5M. In Dallas that range includes many neighborhood retail strips, two- and three-story office buildings, multi-tenant flex buildings, older light industrial buildings, small self-storage facilities and storefront mixed-use buildings in places like Oak Cliff, Deep Ellum and Lower Greenville.
Below $500K, many buildings are better financed under a residential program if they are 1 to 8 unit rentals. For apartment buildings of 9 or more units, the multifamily page goes into more detail.
| Property type | Typical Dallas setting | What we look at first |
|---|---|---|
| Neighborhood retail strip | Major arterials across the city and inner-ring suburbs | Lease expirations, tenant mix, NNN or gross terms |
| Small office | LBJ Freeway, North Dallas, Uptown edge, suburban office parks | Occupancy history, lease length, re-leasing costs |
| Flex and light industrial | Stemmons corridor, Northwest Dallas, Design District | Tenant use, ceiling height, loading, environmental history |
| Self-storage | Edge-of-city and suburban sites | Occupancy and rate history, management, expenses |
| Storefront mixed-use | Bishop Arts, Deep Ellum, Lower Greenville | Blend of commercial and residential income |
A 200-unit apartment community spreads its risk across many leases. A four-tenant strip does not. If one of four tenants leaves, a quarter of the income can go with it. So small-balance underwriting reads each commercial lease: rent, term, renewal options, who pays taxes and insurance, and how long the tenant has been there.
Vacancy assumptions are applied even when a building is fully leased, and the expense budget should reflect what the owner actually pays. On a gross lease, the owner covers more of the costs; on an NNN lease, tenants reimburse most of them, but the owner still carries vacancy and any unreimbursed items.
This example is illustrative and not a quote. An investor buys a small self-storage facility in Dallas County for $1,750,000. Gross potential rental income is $245,000. Underwriting applies 12% vacancy and adds $8,000 in fees and other income, for effective gross income of $223,600.
Operating expenses total $92,500, including on-site payroll and management, which self-storage carries more of than many property types. NOI is $131,100.
At 70% LTV the loan is $1,225,000. Estimated annual debt service is about $103,897, for a DSCR of about 1.26x. The investor brings $525,000 plus closing costs.
| Line | Annual amount |
|---|---|
| Effective gross income | $223,600 |
| Property taxes | $30,000 |
| Insurance | $9,000 |
| Payroll and management | $32,000 |
| Utilities | $7,000 |
| Repairs and maintenance | $6,000 |
| Marketing and software | $5,000 |
| Reserves | $3,500 |
| Total operating expenses | $92,500 |
| Net operating income | $131,100 |
| Loan amount (70% LTV) | $1,225,000 |
| Estimated annual debt service | $103,897 |
| DSCR | 1.26x |
Retail strips depend on tenant mix and visibility. Service tenants such as restaurants, salons and medical offices are common, and many Dallas strip leases are NNN. Look at how much the owner recovers for taxes, insurance and common-area maintenance.
Small office has longer re-leasing times and higher tenant improvement costs, so vacancy assumptions tend to be more conservative. Flex and light industrial buildings are judged on how easily the space can be re-leased to a different tenant if the current one leaves, which depends on ceiling height, loading, power and access.
Property taxes are often the largest expense on a small commercial building. In Dallas County, the Dallas Central Appraisal District sets appraised values, and the combined rate includes the county, city, school district and other taxing units. Owners can protest the appraised value each year. Confirm the rate for your parcel with the appraisal district.
Texas is a non-disclosure state, so sale prices of comparable buildings are not public. Valuation leans heavily on income, which makes signed leases and clean operating statements the most persuasive documents in your file. Insurance is a big line too: North Texas hail exposure affects roofs on strips, flex and storage buildings alike.
On small-balance loans, the sponsor matters. We look at your experience owning or managing similar property, the liquidity you hold after closing and how you plan to handle tenant turnover. LLC and other entity borrowers are standard, and recourse varies by program.
A first commercial purchase is not ruled out, but it helps to show related experience, such as owning several residential rentals, managing a business with commercial leases or partnering with someone who has run similar buildings. Liquidity after closing matters because small buildings can lose a large share of income when one tenant leaves, and the owner has to carry the space, pay for improvements and lease it again.
Small-balance loans are faster than large commercial loans in some ways, but still slower than residential loans. A full commercial valuation, lease review, and environmental and property-condition reviews are common. Dallas flex and light industrial buildings, and older strips that once had dry cleaners or auto service tenants, may need additional environmental work.
Gather these before you request a quote.
Our investor loans are business-purpose loans on non-owner-occupied property, so the building must be leased to third-party tenants. Send the address, property type, price, rent roll and leases. We will rebuild the NOI tenant by tenant with realistic Dallas taxes and insurance and come back with sizing. Get a quote with the form below or call (877) 298-1001.
Roughly $500K to $5M. Larger loans are reviewed on custom terms as well.
Small retail strips, office buildings, flex and light industrial space, self-storage and mixed-use buildings owned as investments and leased to third parties.
Possibly. Single-tenant property is reviewed case by case, with close attention to lease term, tenant strength and how easily the space could be re-leased.
Up to 75% LTV on acquisitions, with the final amount set by DSCR on in-place NOI and by program, property type and balance.
Yes. Self-storage is underwritten on occupancy and rental rate history, with on-site payroll and management included in the expense budget.
They can, because tenants reimburse most taxes, insurance and common-area costs. Underwriting still assumes vacancy and any costs the owner cannot recover.
No. Our investor loans are business-purpose loans on non-owner-occupied property leased to third parties.
Longer than a residential loan. A full valuation and lease, environmental and property-condition reviews are common, so a complete file up front helps.
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