In credit tenant financing, typically the loan from the lender to the landlord is structured as nonrecourse debt.
[2] Occasionally, credit tenant leases are arranged as double net leases, which can increase cash on cash returns for a landlord, but will increase their overall risk, especially as a property grows older.
[2] A "credit tenant" is a tenant with exceptionally good credit, such that the lender to the landlord has very high assurance of timely payment of principal and interest.
Only larger companies are eligible for credit tenant treatment by lenders.
A lender will offer better financing terms for a development with a certain amount of space preleased or currently leased to credit tenants.