Finance Articles

3 Factors to Consider When ...

Choosing a lender can be a difficult task when you have multiple options. We often see clients focusing heavily on price and proceeds, sometimes to a fault. There are many other important, even critical, factors to consider when selecting a lending partner. We have been part of transactions where a client chose the more expensive

Advantages & ...

As a capital advisor, we’ve placed joint venture equity into a variety of project types. We are not in the business of syndication, so the types of equity groups we’ve chosen to align ourselves with are all institutional in nature. These include opportunity funds, hedge funds, private investment firms, and even sophisticated family offices. Some

Promotes vs. Splits – ...

Developers and real estate operators partnering with 3rd party equity sources typically secure profits larger than the percentage of equity capital they invest into their projects. These outsized profits, often called a promoted interest, allow sponsors (the developer or operator) to get more profits than they would otherwise based solely on their actual ownership or

A Zero-Risk Loan: The ...

We’ve written two previous blogs on understanding and reducing developer risk, one illustrating the differences between completion guarantees and repayment guarantees, the other covering the full array of bonding mechanisms. To review, the first article illustrates how completion guarantees offer lower risk for the developer than repayment guarantees. The second points out how bonds can

Common Borrower Mistakes and ...

Borrowers seek the best terms available from prospective lenders. One way to secure such favorable treatment is to simply know the rules of the road when developing your lender relationships. We reached out to several of our better lending resources and gathered opinions on the major mistakes they see borrowers make time and time again.

Bonds and the Developer – ...

Developers face a world of uncertainty. Changes in the market, the regulatory environment, the financial condition of their partners, materials costs, capital markets, plus neighborhood opposition and litigation are just a few aspects of this difficult landscape. Developers take on all of these uncertainties and considerable risk to create a successful project. Bonds provide a

Top 5 Things JV Equity Looks ...

Every aspirational real estate entrepreneur wants to do big deals, even if they don’t have the capital to finance them on their own. For example, taking down a $118MM office asset for repositioning can be done partially with debt, but many times the addition of an equity partner to the venture is needed. Joint ventures

Completion Versus Repayment ...

Developers and investors often seek non-recourse debt, loans for which they are not personally liable. For investors in existing commercial property, that’s often achievable; the subject property (and its existing cash flow) may provide the lender sufficient collateral in case of a recovery. Developers seeking construction loans find non-recourse debt more difficult and, when found,

Real Estate Crowdfunding: A ...

You’ve probably heard the real estate crowdfunding buzz. Thanks to the JOBS act, accredited investors can now receive general solicitations, and the land grab to define and dominate a new niche within the real estate capital markets is well underway. Think Kickstarter for real estate, only now you own hard assets instead of receiving a