Retail Project Construction Financing - Consulting & Negotiations Assistance

For retail developers, the availability of retail project construction financing is a matter of the greatest importance. Most of the retail project construction financing in the U.S. has (historically) been controlled by major commercial banks. The commercial bank has an understanding of the local market conditions, can get to the property on short notice and provide a higher level of due diligence investigative capacity than most of the other players in the construction phase project financing continuum.

That is the way things were done in the 20th century. The 21st century is a business climate dominated by the near instant availability of information pertaining to market and program development issues. The result has been a dramatically increased role for institutional investors in the commercial real estate development arena in general, and the retail property market in particular.

Institutional offerings typically provide a much higher loan-to-cost ratio for the interim loan than is the norm for commercial bank loans. In addition to the typical institutional private placement offering route, there is the potential to file and create a TIF Plan or CDD Plan to provide interim financing.

In any case, the interim funding requirements require the developer to (at the very least) undertake a comprehensive investment incentive entitlement review that includes the availability of one (or more) local, state an/or federal statutory incentive. The most common route at the local government level usually focuses on a TIF Plan. Having said that, consideration must be given to the following entitlements:

New Markets Tax Credits
Brownfields Tax Credits
Historical Tax Credits
Bonus Depreciation Expense Allowance
State "Piggy-Back" Tax Credits
State Grants/No-Interest Loans
Federal Loan Insurance
Federal Loan Guarantees
Federal Direct Loans

Rainmaker Marketing Corporation can be your "one-stop shop" for entitlement reviews at the local, state and/or federal level. Our consultants have a national reach and a local understanding of the issues and opportunities that commercial developers need to have as part of their project's proposed capital funding plan structure.

Finally, have you considered undertaking an equity raise using the fractional real estate ownership interest syndication (tenants-in-common based real estate offering) to raise equity contributions as early as the pre-construction phase? We have. There is an orderly market opportunity for projects having total development budgets of at least $2.5 million.

No matter what industry or commercial real estate project group you are seeking to develop, Rainmaker Marketing Corporation can provide you with the types of value-added services that create real financial investment leverage, reduce the project's equity funding gap and/or drastically reduce the equity dilution prospects for the client. If you haven't given serious consideration to the equity dilution issue, then it's time to talk to someone who does understand it so you can come to grips with the nature of the opportunity that these incentives can create for your advantage and benefit.