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The "new century"
of private placement offering investing through Internet portals is
eroding the position of Qualified Institutional Buyers as the exclusive
participants in "sweetheart deal" private placement
offerings. More and more, commercial banks, insurance companies,
venture capital funds, hedge funds and pension plans are finding that
commercial real estate development financings can provide opportunities
that, heretofore, would be unimaginable less than ten years ago.
Today's sophisticated investor is looking beyond the need for near-term
liquidity in return for having routine access to private placement
offerings that can demonstrate cash-on-cash returns above 25% per
annum. Indeed, the bar seems to be quite high for projects coming in
the 2008 pipeline, by providing for multiple equity conversion scenarios
that provided investor security (during the construction period - highest
risk period) and alternatives for both near-term window investors and
mid-term window investors. The passage of the Economic Stimulus Act
of 2008 has even added bonus depreciation expense allowances in on a
nationwide basis. It doesn't get much better than this - despite all
of the rumor-mongering that is being blown by political winds. The
wheels of commerce continue to churn and that "most resilient
economy" praised by Greenspan will continue to shine. If you
are seeking to invest in commercial real estate development programs, you
need to talk to Rainmaker.
The important issues the
sophisticated investor has to conquer include:
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Understanding the goals
of each capital funding plan that is the heart of the PPM; and
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Understanding how the
securities are meant to function within the capital funding plan; and
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Understanding the risks
and the plans the issuer has for managing those risks; and
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Understanding the
organizational structure of the issuer and how it may be impacted by
the various risk elements that can be reasonably expected to impact
the business; and
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Understanding the
rights of the security holders are being vested in the securities
issue; and
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Focusing
on the key due diligence issues that are a must when it comes to
investing in commercial
real estate development financings.
If
now is your time, then ask us about your participation in our client
transaction pipeline. Rainmaker covers almost the entire spectrum,
but can offer you the one-on-one or B2B support that you didn't
think you could afford. You can. Things will look different
from the inside.
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