|
The
critical considerations that must be "baked into" each
syndication plan approach include:
-
Investment
leverage. The condominium plan is limited to the construction
phase capital expenditures for the last month of the construction
phase. The corresponding percentage of the total space plan
must be less than the pro-rata contributions the net sales proceeds
provide (e.g.: if the condominium sales plan is intended, upon
sell-out, to provide 12% of the total project development budget,
the corresponding portion of the project space plan required to
fulfill the sales goal must be less than 12% of the total space
plan). In some cases, this will require a significant amount
of creativity and expertise to achieve (you'll want Rainmaker to
create your plan to maximize this opportunity).
-
Equity
Investor Cutoffs. The condominium plan and the TIC plan
approach lend themselves to reducing investor participation to a
specific time period and a finite return that is commensurate with
the risk accepted by the investors. In particular, the TIC
plan construction pool risk investors can be limited (and are
routinely limited) to participating in the construction phase with a
second level of TIC syndication plan sales proceeds being used to
retire the construction pool risk investors without necessarily
decreasing the developer's long-term incremental equity enhancement
and investment income sharing.
Contact Rainmaker
Marketing Corporation and get the facts.
|
|
