Retail Property
Investment Syndicates...
Over the last 10
years, retail property
investment syndicates have continued to evolve. Most retail property
acquisition 
financing syndicates maxed out the available product of fixed yield
dividend investments that ranged from 7% to 10% per annum (for investors), while
the transaction sponsor walked away with yields approaching 100% per
annum. In fairness to the investing public, it would seem the lion's share
of the equity gains were being captured by sponsors, promoters and developers -
but certainly not the investing public. These commercial real estate
investments have; heretofore, turned out yields comparable to Guaranteed
Investment Contracts ("GICs").
Now
that is all set to change with the emergence of a new capital market platform
designed to allocate profit potential directly to the parties bearing the burden
of these investment risks.
The syndication
platform (the "syndication platform") provides developers, promoters
and sponsors (quite often, all the same entity) with a ready source of project
development financing of at-risk equity contributions. Each new
syndication must be for projects having budgets of no less than $2,500,000 of
which $2,300,000 would be the total net proceeds if the syndication is
successful. There is no upper limit - only what the market will absorb in
an orderly marketing period.
For
investors, the proprietary project screening and valuation program approach
ensures that investors receive a fair share of the future profits that is
commensurate with the risks being taken. For this condition to become a reality,
risks and rewards must have a corresponding counter-balance to justify the
distribution. The syndication platform provides a structure that is
designed to assign risks and economic rewards accordingly, with the basic
capitalist economic principles governing all aspects of the syndication program
approach.
The
result is a construction phase financing platform that can only make commercial
income-producing property investing opportunities really perform.
Click
here for a continuation.
