Retail Project
Construction Financing...
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:
