What is the difference between owner-occupied and investment CRE at Exchange Bank?

Owner-occupied CRE at Exchange Bank is a loan where the borrower's operating company occupies at least 51% of the square footage. Investment CRE is a loan where the borrower leases the property to unrelated tenants. The distinction matters for pricing, term, underwriting standard and SBA eligibility — SBA 504 real estate requires majority owner-occupancy, while investment CRE cannot use SBA funding. Owner-occupied credits typically carry lower pricing because the borrower's operating cash flow is the primary repayment source, and the bank's risk analysis includes the business's income statement alongside property NOI.

How does Exchange Bank finance a Wine Country vineyard property?

Wine Country vineyard financing at Exchange Bank combines real estate collateral (acreage, improvements, tasting room if applicable) with the underlying operating business. Underwriting considers vintage production history, long-term grape contracts, tasting-room direct-to-consumer sales, wine-club subscriptions and any hospitality revenue. Santa Rosa underwriters know the sub-AVA differences between Russian River Valley, Dry Creek, Alexander Valley, Sonoma Coast and Alexander Valley — critical context for a blind appraiser, and a reason local underwriting delivers smarter structures. Loan sizes range from $250,000 to $10 million depending on acreage and business scale.

What is the maximum multifamily unit count for investment CRE?

Exchange Bank investment multifamily CRE typically covers 2-50 unit properties. Smaller properties (2-4 units) often qualify under residential real-estate lending guidelines rather than commercial. 5-50 units is the core commercial multifamily band for the bank, covering neighbourhood apartment buildings in Santa Rosa, Petaluma, Rohnert Park and Healdsburg. Above 50 units the deal is typically routed to specialty multifamily lenders, CMBS or agency (Fannie/Freddie) financing — outside the in-house product set but referred to relationship partners.

How does construction-to-permanent financing work on commercial property?

Construction-to-permanent CRE at Exchange Bank closes a single loan that funds construction draws during the build phase, then converts automatically to a permanent amortising mortgage at certificate of occupancy. The borrower closes once, pays one set of closing costs, and locks the permanent rate at close or at conversion depending on structure selected. Construction draws are governed by a draw schedule, progress inspections and retainage. Common uses include owner-occupied commercial buildings, restaurant tenant improvements, hospitality expansions, winery crush-pad additions and small multifamily ground-up.

What is the DSCR threshold for investment CRE underwriting?

Debt-service coverage ratio (DSCR) analysis is the primary cash-flow test for investment CRE at Exchange Bank. The standard threshold is 1.25x, meaning property net operating income must cover annual debt service 1.25 times with room to spare. Properties with stronger tenant quality, longer lease terms or better market position may underwrite at slightly lower DSCR. Properties with shorter lease terms, weaker credit tenants or more speculative income streams typically require higher DSCR — 1.35x or above. Local appraisal data and rent-roll analysis validate the income side of the ratio.

Commercial Real Estate Lending at Exchange Bank: Wine Country CRE With Local Underwriting

Exchange Bank writes commercial real estate credit across five property-type categories — owner-occupied CRE for operating companies, investment multifamily from 2-50 units, construction-to-permanent for ground-up and major renovation projects, Wine Country vineyard financing, and hospitality/tasting-room properties. Every file is underwritten in Santa Rosa by lenders and credit analysts who know the sub-AVA, submarket and neighbourhood economics that drive appraisal and debt-service coverage.

CRE credits above $250,000 go to the in-house credit committee weekly. Deals leverage appraisal from local MAI and California Certified General appraisers, Phase I environmental on collateral over $500,000, and title commitments from Sonoma County title companies. Flood determinations follow FDIC flood-insurance compliance guidelines.

Start a CRE Conversation SBA 504 for Real Estate

Exchange Bank commercial real estate lending view showing owner-occupied, investment multifamily, construction-to-permanent and vineyard CRE loan categories

Owner-Occupied CRE ($100K-$10M)

Owner-occupied commercial real estate financing at Exchange Bank serves operating companies acquiring or refinancing the building they occupy. A Santa Rosa dental practice buying its office condo, a Petaluma wholesaler acquiring a warehouse, a Sebastopol professional-services firm refinancing the headquarters building from a variable to a fixed rate — all fit here. Underwriting looks at the operating business's cash flow first (debt-service coverage from the business operations) and at the property second (appraised value and LTV). Majority-occupancy requirement (51%+) is standard. Loans pair well with SBA 504 structures that stretch amortisation to 25 years at favourable pricing.

Investment Property CRE (2-50 Units)

Investment multifamily, retail and mixed-use CRE is the second core category. Loans cover 2-50 unit multifamily buildings in Santa Rosa, Petaluma, Rohnert Park, Healdsburg, Sebastopol and Napa — neighbourhood apartment buildings, small mixed-use properties, and smaller retail strip centres. DSCR analysis (typically 1.25x minimum) drives the cash-flow test. Rent rolls, leases, tenant-quality review, submarket vacancy data and expense ratios are standard exhibits. Terms run up to 25-year amortisation with 5-, 7- and 10-year rate-reset structures. LTV typically caps at 75% on stabilised multifamily and 70% on mixed-use or retail.

Construction-to-Permanent

Construction-to-permanent financing funds the build phase through scheduled draws and converts automatically to a permanent amortising mortgage at certificate of occupancy. Single close, one set of closing costs. Common uses include owner-occupied ground-up, major renovation or tenant-improvement projects, small-to-mid multifamily ground-up, and winery or tasting-room expansions. The build phase typically runs 6-18 months, governed by a draw schedule validated by the contractor's budget, progress inspections at each draw, and 10% retainage through substantial completion. Post-conversion, the loan amortises on a conventional CRE schedule with selected fixed or floating pricing.

Wine Country Vineyard Financing

Vineyard financing is the speciality vertical for Exchange Bank rooted in 130+ years of Sonoma County underwriting. Loans finance acreage acquisition, crush-pad and winery building construction, tasting-room improvements and vintage-inventory lines. Underwriting combines real-estate collateral value (acreage and improvements) with operating-business review (vintage production, grape contracts, wine-club subscriptions, tasting-room DTC sales, hospitality revenue). Local sub-AVA knowledge matters — a Russian River Valley pinot vineyard and a Dry Creek zinfandel vineyard have materially different grape-pricing and yield profiles. Blind out-of-area underwriters tend to miss these distinctions.

Hospitality & Tasting-Room Properties

Hospitality CRE covers small lodging (boutique inns, bed-and-breakfasts, small hotels), tasting rooms, event-venue properties and restaurant buildings. Underwriting reviews seasonality, RevPAR trends where available, local tourism drivers (Sonoma County wine-region visitation, Napa cross-pollination), and the operator's management experience. Owner-occupied hospitality deals underwrite well under SBA 504 for the real-estate component combined with SBA 7(a) for working-capital and FF&E components. A Healdsburg boutique inn acquisition, a Sonoma Square tasting-room acquisition, a Glen Ellen event-venue refinance — all typical files for the commercial real estate team at Exchange Bank.

Specialty: Mixed-Use & Live-Work

Mixed-use properties with residential units above ground-floor retail are common in Sonoma County downtown cores — Healdsburg Plaza, Sonoma Square, Fourth Street in Santa Rosa, downtown Petaluma and Sebastopol. Mixed-use financing analyses each income stream separately: retail lease quality, residential unit rent roll and owner-occupancy (if applicable). LTV caps slightly below pure multifamily due to property-type complexity. A live-work variant — where the owner occupies one unit and leases the rest — underwrites as owner-occupied mixed-use with occupancy documentation.

Property Type	Min LTV	Max Term	Amortisation	Recourse	DSCR
Owner-Occupied CRE	Up to 80% LTV	5-10 yr reset	25 yr (20 yr conventional)	Full recourse standard	1.20x+ blended
Investment Multifamily 2-50 units	Up to 75% LTV	5-10 yr reset	25 yr	Full recourse standard	1.25x+
Mixed-Use / Retail	Up to 70% LTV	5-7 yr reset	20-25 yr	Full recourse	1.30x+
Construction-to-Permanent	Up to 75% LTC / 70% LTV	Build + 5/7/10 yr	25 yr post-conversion	Full recourse with completion guaranty	1.25x pro-forma
Vineyard / Winery	Up to 65% LTV on ag land	5-10 yr reset	20-25 yr	Full recourse	1.25x blended
Hospitality / Tasting Room	Up to 65% LTV	5-7 yr reset	20-25 yr	Full recourse	1.40x+

Sub-AVA & Submarket Knowledge

A Russian River Valley chardonnay vineyard and a Dry Creek zinfandel vineyard are 25 miles apart and have materially different grape pricing, yield patterns, vineyard-development costs and exit-market dynamics. An Alexander Valley cabernet vineyard and a Sonoma Coast pinot vineyard sit in different climate zones with different disease pressure. The credit team at Exchange Bank knows these distinctions by instinct. An out-of-area underwriter reviewing a Sonoma County file for the first time typically misses them, leading to either overly-conservative structures that lose the deal or overly-aggressive advances that create collateral exposure.

Per Federal Reserve community-bank research, local-market expertise is cited repeatedly as a competitive advantage for community-chartered institutions.

Map view of Sonoma County sub-AVAs with Russian River, Dry Creek, Alexander Valley and Sonoma Coast highlighted for local CRE underwriting context

Local appraisal and Phase I environmental due diligence workflow with Sonoma County title commitment and flood determination

Local Appraisal & Environmental Partners

Every CRE credit at Exchange Bank relies on appraisal, environmental and title work from local partners. MAI and Certified General appraisers who cover Sonoma County full-time have current comparable-sales data, up-to-date market-rent surveys and visibility into transactions not yet in public records. Phase I environmental reports draw on decades of local industry history — former gas stations, dry cleaners, agricultural chemical storage sites and other property conditions that matter for due diligence. Title partners know Sonoma County recorder practice and local easement patterns. The combined local expertise shortens due diligence and produces more reliable outcomes.

Flood determinations and insurance binders follow current FDIC compliance requirements.

Decision Authority & Relationship Continuity

Credit committee at Exchange Bank meets weekly in Santa Rosa. Members know the submarkets, know the major sponsor groups and know the institutional context for a given deal. Approval authority does not bounce through three escalating offsite layers. Post-close, the same relationship manager stays on the credit for the life of the loan, so covenant reviews, annual renewals and any workout conversations happen with continuity. Borrowers who have refinanced into Exchange Bank from national chains frequently cite relationship continuity as the reason they stay beyond the initial term.

Credit-committee decisioning at local banks is protected and governed by California DFPI supervisory standards.

Santa Rosa credit committee decisioning meeting with local lenders, credit analyst and chief credit officer reviewing a vineyard CRE package

Dentist Office Acquisition

Santa Rosa dental practice buys its office condo. $1.4M purchase, 20% down. SBA 504 structure combines the Exchange Bank first mortgage with CDC second. 25-year amortisation. Payment below prior rent by $900/month. Owner-occupancy at 100%.

12-Unit Apartment Refi

Petaluma investor refinances a 12-unit apartment building from a maturing 5/1 ARM at a national lender. $3.8M new loan, 65% LTV. 10-year fixed, 25-year amortisation. DSCR 1.48x on current rent roll. Local appraisal came in ahead of the national lender's value.

Vineyard & Tasting Room

Russian River Valley vineyard acquires 22-acre adjacent parcel and builds tasting room. Blended real estate plus construction-to-permanent, $4.2M total. Local sub-AVA context priced the acreage at a favourable per-acre value. Tasting room opens pre-harvest.

Talk Through Your CRE Deal

The commercial real estate team at Exchange Bank reviews pre-LOI deals, refinance candidates and construction packages daily. Call the commercial line at 707-524-3000 extension 1100 or visit any Sonoma County branch. Intake meeting runs 60-75 minutes with sponsor financials, property detail and deal rationale.

Find Your Branch

What is owner-occupied vs investment CRE?

Owner-occupied: borrower's operating company occupies 51%+ of the square footage. Investment: leased to unrelated tenants. Different underwriting emphasis and pricing.

How does vineyard financing work?

Combines real estate collateral with operating-business review. Sub-AVA knowledge drives pricing. $250K to $10M loan sizes.

Max multifamily unit count?

2-50 units in the core in-house product. Above 50 routed to specialty or agency lenders.

How does construction-to-permanent work?

Single close. Draws during build. Automatic conversion to amortising mortgage at CO. One set of closing costs.

What DSCR threshold for investment CRE?

Standard 1.25x. Stronger properties may price at 1.20x. Hospitality and speciality 1.35-1.40x.

Commercial Real Estate Lending at Exchange Bank: Wine Country CRE With Local Underwriting

Real Estate Lending Snapshot: Five CRE Property Categories

Owner-Occupied CRE ($100K-$10M)

Investment Property CRE (2-50 Units)

Construction-to-Permanent

Wine Country Vineyard Financing

Hospitality & Tasting-Room Properties

Specialty: Mixed-Use & Live-Work

CRE Product Parameters

Local Underwriting By the Numbers

The Wine Country Underwriting Advantage

Sub-AVA & Submarket Knowledge

Local Appraisal & Environmental Partners

Decision Authority & Relationship Continuity

Three CRE Sponsor Profiles

Dentist Office Acquisition

12-Unit Apartment Refi

Vineyard & Tasting Room

Talk Through Your CRE Deal

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