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| | Commercial Real
Estate Development Financing - Capital When You Need It...
The
commercial
real estate development financing market continues to evolve and
change as the expectations and goals of  developers and investors
change. Today, commercial real estate development financing
includes:
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Construction
loans secured by a mortgage tied to the commercial real estate
development loan (the mainstay funding product for the commercial real
estate industry); and
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Private
placement offerings of equity, preferred equity and/or convertible
securities to provide both equity and debt capital subject to an
exemption under the Securities Act of 1933 and usually for
institutional investors and/or hedge funds; and
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Real
estate syndications to provide equity funding for projects seeking
to qualify for a construction loan, or to replace construction loans
altogether (100% equity financing). Rainmaker Marketing
Corporation has exclusive
access to a syndication program that can support projects having
development budgets of at least $2.5 million. Syndications may
be available for funding as early as the pre-construction phase and as
late as the date that stabilized operational capacity is attained.
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Each approach
has its own risks and rewards that require careful consideration prior to
creating the final capital
funding plan proposal for the project.
Rainmaker
Marketing Corporation's
approach is to:
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First,
review all entitlements
to determine the availability of investment incentives that are
authorized pursuant to a local, state and/or federal statute.
These entitlements can be contrived to create an annuity based solely
upon the entitlement and not upon the real property or business
prospects of the underlying project. Understanding the totality
of the impact this approach can have is central to the success of the
developer's program; then
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Next, the
capital funding plan is analyzed (best-case, middle-case, worst-case
scenarios) to determine how the entitlements can best be employed for
the benefit of the project, the lender, the investors and the
developer; then
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The
syndication due diligence program gets a final review and the syndication
can then move forward. |
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Do
You Know The Secret?
When it comes to commercial real
estate development finance, it doesn't matter whether you need to raise
$5 million or $50 million, the out-of-pocket costs, advance fees and
project due diligence costs will always require the same relative
investment dollars the promoters have to fund. Do you know what
that amount is? Do you know the Secret? |
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