How Coworking and Serviced Office Owners Approach a Commercial Mortgage
Buying the premises your coworking or serviced office already trades from is a defining step for any operator. At Ardent Capital Group we speak with workspace owners about this kind of commercial property purchase regularly, so this guide walks through how a lender reads the asset, what deposit to plan for, and how the finance is commonly structured.
Ardent Capital Group is a specialist in commercial mortgages for coworking and serviced office operators across Australia. Our team can help you move from tenant to owner, and give you clear lending advice on structure and strategy.
- Access finance from $100,000 to $10,000,000+, aligned to how you hold and occupy the building.
- Over $500,000,000 facilitated across a decade for 1,000+ Australian borrowers.
- Coverage across Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Hobart and surrounding regional towns.
- Deep experience with strata offices, whole-floor acquisitions, split titles and CBD fringe assets.
This is specialist territory, which is where our serviced office property loan desk comes in.
Why coworking and serviced office owners choose to buy
Fit-out costs are material, often stretching from cabling and power density, to acoustic treatment, joinery, meeting room AV, end-of-trip, upgraded HVAC zoning and secure access control. Relocating that investment is expensive or impractical. Your member base is tied to the address, the commute pattern and the neighbourhood amenity. Many operators have proven resilience through cycles by flexing desk mix and price bands, which supports a long-term hold. Mortgage repayments build equity in a tangible asset while you monetise the space every day.
Main drivers:
- Control of rent profile and tenure, with the ability to match loan term to your operating horizon.
- Preservation of fit-out value across cycles, rather than losing it at lease expiry under make-good.
- Brand and member retention anchored to a stable address, especially in CBD fringe and transit-rich locations.
- Ability to plan multi-year capex and product mix without landlord consent.
- A clearer path to refinance, draw equity and fund expansion once seasoning is in place.
Buying may not suit a short lease horizon, a planned relocation, an uncertain ramp-up, or when capital is better deployed into sales channels, software, team or a second site. The decision sits with you.
How lenders approach a coworking or serviced office purchase
Deposit and LVR. Premises like these are standard commercial security, and typically gear to around 80 per cent, so plan for a deposit near 20 per cent. Stronger serviceability and owner-occupier use sit at the top of that band, while more specialised or lease-dependent files can call for more. In some cases a lender will consider up to 100 per cent by taking additional property as security, and our broker team can explain when that fits.
Loan term and structure. Commercial loan terms commonly run 10 to 15 years with the banks, and up to 25 to 30 years with non-bank lenders. Structures include principal and interest for steady amortisation, or interest only when preserving cash flow is the priority, for example during a refurbishment or capacity expansion.
Security and serviceability. The property is the primary security. Lenders assess business financials, recurring revenue, desk utilisation, occupancy history, membership mix, average commitment length, churn and margin. Serviceability is tested using interest cover or debt service cover ratios against realistic assumptions.
Owner-occupier treatment. Lenders generally view owner-occupier purchases favourably on pricing and LVR because the trading business occupies the property, aligns incentives and reduces vacancy risk.
Ownership structures a lender sees
Many coworking and serviced office operators hold the freehold in a separate entity, often a company or trust, and lease the premises to the trading business at a commercial rent. A lender then reads that inter-entity lease as the serviceability line: the rent, outgoings, review mechanics and make-good are documented, which supports the valuation and the credit assessment. The separation also ringfences the property from trading risk and keeps the asset ready for a future refinance or sale. With a background in financial planning, Nick and the Ardent Capital Group team can map the structure that fits your position, then work with your accountant to confirm the final detail.
Where an operator holds the premises through a self-managed super fund, the finance is arranged differently again. Commercial premises typically qualify as business real property, so an SMSF can hold the building and lease it back to the trading business at market rent through a limited recourse borrowing arrangement, with the property held on a bare trust by a custodian. Lenders apply lower LVRs and larger cash buffers to these files, and the compliance and setup obligations are stricter. Our work is the lending, and the tax, super and ownership questions sit with your accountant and, for a fund purchase, a licensed SMSF adviser to confirm before contracts are signed.
The lender's checklist
- Business financials and quality of revenue, including P&L, BAS, tax returns, recurring membership share, average tenure, churn and site-level performance.
- Serviceability metrics, typically interest cover or debt service cover, tested under sensitised rates and realistic occupancy.
- The property and its valuation, including title, zoning, floor plate efficiency, natural light, lift capacity, end-of-trip, car parking, compliance, and connectivity such as NBN Enterprise Ethernet or diverse fibre paths.
- Fit-out and capex profile, noting that soft fit-out and specialised joinery are often only partly reflected in valuation.
- Deposit and equity position, including available cash, ability to leverage your equity in other property, and vendor terms.
- Lease and occupancy, where part of the site is sublet or where a headlease to the trading entity supports a valuation.
A specialist broker who understands coworking revenue mechanics, desk mix and valuation nuances shortens the path to bankable terms.
One way this can play out
This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.
- Situation: An operator with a 1,100 sqm CBD fringe floor, 82 per cent average occupancy, and a mix of hot desks, dedicated desks and 35 serviced offices. Current rent and outgoings total $620,000 a year, with fit-out spend to date of $1,050,000.
- Goal: Purchase the freehold strata level, offered off-market at $8,200,000, and fund a $350,000 refresh for more phone booths and upgraded meeting room AV.
- Options we would map:
- Deposit and LVR: an 80 per cent commercial mortgage, with the deposit drawn from cash plus the ability to leverage your equity in a residential investment property.
- Structure: the title held in a corporate trustee with a commercial lease to the trading company, the market rent set to support debt service and valuation.
- Cash flow: interest only for 24 months to preserve liquidity through the refit, then a switch to principal and interest once the refresh settles and trading stabilises.
- A separate capex line of $350,000 for the refresh, with terms matched to the useful life of the works.
- How we would approach it: we would map the ranges, structures and repayments, test serviceability and lender appetite, and set out the documents and timelines. The decision stays with you, and the figures above are illustrative, not confirmed outcomes.
Other lending we can help with
- Asset finance for coworking equipment: Meeting room AV, enterprise printers, phone systems, access control, CCTV, café gear and lockers financed on terms aligned to useful life.
- Fit-out and refurbishment finance: Partitions, acoustic booths, joinery, HVAC zoning, power upgrades, end-of-trip and compliance works funded alongside or separate to the mortgage, often as a dedicated office fit-out finance facility.
- Working capital loans: Smooth cash flow through seasonal occupancy shifts, opening specials and marketing pushes for new site ramps, with working capital for a serviced office when timing gaps open up.
- Business overdraft: Cover timing gaps between member receipts, bond movements and supplier payments.
- Refinancing and debt consolidation: Reduce cost of funds, simplify multiple facilities, and align terms with asset life once revenue is seasoned.
- Construction and renovation: Convert raw floor plates, add wet areas, lift capacity or additional egress to meet code and product mix.
- Business or premises acquisition finance: Buy a competitor’s centre, buy in or buy out a partner, or acquire the freehold when offered.
Owning the premises can free equity for future growth, and a refinance can consolidate facilities into a cleaner structure.
Talk to a coworking and serviced office finance specialist
Ardent Capital Group arranges and structures commercial mortgages for coworking and serviced office operators. We align the finance with how you hold the property and how your business occupies it, with clear advice on deposits, entities, leases and serviceability.
We service Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra and surrounding metro and regional areas. We have helped facilitate over $500,000,000 in funding over a decade for over 1,000 borrowers. If you want a specialist view and a path to optimal financial outcomes, talk to our team.
Questions we're often asked
What deposit do I need to buy a coworking or serviced office premises?
Most commercial premises gear to around 80 per cent, so plan for a deposit near 20 per cent. Stronger serviceability and owner-occupier use sit at the top of that band, while more specialised or lease-dependent files can call for more.
Will a lender value my fit-out?
Specialised fit-out such as booths, partitions and joinery is often only partly reflected in valuation. Many operators fund this with a separate fit-out facility to match term to useful life.
Can my SMSF buy the building and lease it to my coworking business?
Yes, where the property qualifies as business real property and the lease is at market rent. Expect lower LVRs, tighter cash buffers and compliance obligations.
How do lenders view coworking revenue volatility?
They test occupancy history, desk mix, member tenure, churn, pricing bands, pipeline and site-level performance. Multi-site operators with stable metrics and clean reporting present well.
Can I get interest only to preserve cash flow?
Often yes, subject to policy and serviceability. Interest only terms can suit refurbishments or early stabilisation periods before converting to principal and interest.
Do lenders favour certain locations or building types?
Yes. CBD and city fringe assets near transport with efficient floor plates, strong services, end-of-trip and quality connectivity are assessed more favourably than compromised stock.
Can I finance a strata office or part-floor purchase?
Yes. Strata titles and part-floor lots are common for this sector. Valuation and bank appetite improve with a clean title, a sensible lease to the trading entity and strong serviceability.
Written by
Nick Chong
Managing Director, M.AppFin, Dip. Mortgage Mgmt
Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.
