Crowdfunding Has Grown Up and Is Here to Stay
Crowdfunding in the commercial real estate space has steadily evolved since passage of the JOBS Act and now represents a viable way to capitalize the equity side of a deal. Institutional-quality platforms have grown considerably in recent years and continue to gain market share. In our “Intro to Development Deal Structuring” blog, we covered several […]
Housing Affordability: National Housing Trends
At a macro level, the U.S economy is on a hot streak. Now into month 100 of the current economic expansion (the 3rd largest in recorded U.S. History), the unemployment rate is flirting with 4.10% as of November 2017, in sync with extremely low jobless claims not seen since the 1970’s, and consumer confidence is […]
3 Factors to Consider When Choosing a Lender
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 & Disadvantages of JV Equity Partner
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 – What’s the Difference?
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 Developer’s Dream
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 How to Avoid Them
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 – Reduce Risk
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 for in a Partner
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 Guarantees
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, […]
