100% Construction JV Equity
Our funding source provides 100% construction joint venture equity financing
We provide financing for all types of commercial real estate and alternative energy projects. In general, they must meet the following criteria:
- The project is NEW DEVELOPMENT ONLY, and requires an investment of $10million or more
- The project must be shovel-ready–defined as ready to break ground in 90 days or less
- The project must be sponsored by a experienced developer with a significant financial stake
The process begins by completing and submitting a Project Summary Form and:
- A business plan or executive summary
- Financial projections
- A development team summary
In addition, the applicant must initiate the application process by paying a $500.00 application fee. If accepted, an LOI will be issued outlining the terms and conditions, including the details of the refundable due diligence deposit.
Refundable Due Diligence Deposit
As a condition of financing, the investment fund will require a fully refundable due diligence deposit that will be used to cover their underwriting expenses. However, if the project fails to close for whatever reason, the deposit will be returned in its entirety. This is guaranteed by the lender.
During formal underwriting, the fund will determine its equity participation in the project–typically 15%-25%. As such, they will take a minority interest in the project until completion/stabilization when they will look to exit the transaction via refinancing, sale of the project, etc.
Equity Financing Advantages
The advantages of this financing structure are several:
The developer pays no interest during the entire construction period–potentially saving millions of dollars in interest expense; because the fund participates as a 100% joint venture equity partner, they assume nearly 100% of the project risk until completion or stabilization; rather than the typical equity of 20% – 40% or more that is required in a traditional financing structure, the developer will only be responsible for a refundable due diligence deposit. This will allow the developer to reduce their up-front capital requirements while retaining a larger percentage of the project.
What Kind Of Opportunities Are We Looking For?
We are interested in large (over $10 million) commercial real estate projects. In general, our investment fund has three main criteria:
- The project is new development (no refinancing) and is “shovel-ready”,
i.e., ready to break ground within 30-60 days of approval;
- The market fundamentals for the project are sound;
- The development team has a significant financial stake in the project
and has experience developing the type of project contemplated.
What Industries Are We Focused On?
Virtually all types of commercial real estate (no 100% residential projects) including:
- Hotel resorts and casinos
- Alternative energy (solar, wind, geothermal, hydro, biomass, waste conversion, etc.)
- Medical facilities
- Public-use facilities
- Infrastructure (highway, rail, bridges, roads, etc.)
- Industrial real estate
- Recreational facilities
Rates, fees & programs subject to change without notice. Terms may be adjusted based on the characteristics of the transaction.