JOINT VENTURE FUNDING FOR COMMERCIAL DEVELOPMENT PROJECTS
The global economic climate has changed dramatically in the last 18 months and finding reliable funding sources is a challenge. Fortunately, in our network, we have gained recent access to a large USA-based investment fund that is investing in large-scale development projects.
Investment Fund Criteria:
They are interested in large ($10M and much larger) commercial real estate and alternative energy projects. In general, the investment fund has three main criteria:
1. The project is new construction/development (no refinances) and is "shovel-ready", i.e., ready to break ground within 30-60 days of approval;
2. The market fundamentals for the project are sound;
3. The development team has a significant financial stake in the project and has experience in developing the type of project contemplated.
Project Types:
• Commercial Real Estate
• Hotel Resorts and Casinos
• Alternative Energy (solar, wind, geothermal, hydro, biomass, waste conversion, etc.)
• Assisted Living
• Hospitals and Health Care Facilities
• Infrastructure (roads, highways, rail, etc.)
• College and University Buildings
• Multi-Family
• Public-Use Facilities
• Recreational Facilities
• Industrial
• Other Related Types
Size: $10 Million Minimum; $1 Billion Maximum
Location: USA and International (USA-friendly countries)
Stage: Shovel-Ready (i.e., ready to break ground in 90 days)
Terms: Up to 100% Equity Financing Available; THERE IS NO LOAN; as such, there are no interest payments during the term of the investment; 3 to 5 Year Term.
Timing: 30 to 45 Days to issue LOI; Time to Closing: 90 to 180 days from date of signing LOI.
Pre-sales: There are no pre-sales or pre-leasing requirements.
Future Value: Future value should be at least 1.5 times the original investment.
Background of Sponsor: Project Developer with a Significant Track Record and Financial Strength
Equity Participation: During formal underwriting, the investment fund will determine its equity participation in the project, which will typically be from 10% to no higher than 25%. As such, the investment fund will take a minority interest in the project until completion or stabilization when they will look to exit the transaction via buyout, refinancing, etc.
Typical financing structure: Our funding source provides 100% joint venture equity financing. In so doing, they cover 100% of the total project costs including, in most cases, monies the developer has already expensed for soft costs, pre-development, etc. In other words, they will allow the developer to recover capital that has already been invested in the project by including it in the total financing amount.
Compensatory Balance: By allowing the developer to recover hard and soft costs, the investment fund recognizes that the developer's risk capital will eventually be withdrawn from the project. As a result, they require that the developer place a cash deposit of up to 5% of the project cost in an escrow account. The developer allows the investment fund to draw down up to 25% of the escrowed amount. If, for whatever reason, the developer or the investment fund decides not to proceed, 100% of the full escrowed amount is returned. The escrow is held only until closing and it pays no interest. Current project equity or current monies injected into project will not be allowed in lieu of the required deposit because, in most cases, the developer will be allowed to recover those costs.
Financing Advantages:
• The developer pays no interest during the entire construction period--saving millions of dollars in interest expense;
• Because the investment fund participates as a 100% joint venture equity partner, they assume 100% of the project risk until completion or stabilization;
• When the project is complete, the developer will own the project outright, less the investment fund's minority interest;
IMPORTANT: If you are serious about securing funding, please email us a 1 to 5 page Executive Overview. Thank you. We look forward to earning your business.
Investment Fund Criteria:
They are interested in large ($10M and much larger) commercial real estate and alternative energy projects. In general, the investment fund has three main criteria:
1. The project is new construction/development (no refinances) and is "shovel-ready", i.e., ready to break ground within 30-60 days of approval;
2. The market fundamentals for the project are sound;
3. The development team has a significant financial stake in the project and has experience in developing the type of project contemplated.
Project Types:
• Commercial Real Estate
• Hotel Resorts and Casinos
• Alternative Energy (solar, wind, geothermal, hydro, biomass, waste conversion, etc.)
• Assisted Living
• Hospitals and Health Care Facilities
• Infrastructure (roads, highways, rail, etc.)
• College and University Buildings
• Multi-Family
• Public-Use Facilities
• Recreational Facilities
• Industrial
• Other Related Types
Size: $10 Million Minimum; $1 Billion Maximum
Location: USA and International (USA-friendly countries)
Stage: Shovel-Ready (i.e., ready to break ground in 90 days)
Terms: Up to 100% Equity Financing Available; THERE IS NO LOAN; as such, there are no interest payments during the term of the investment; 3 to 5 Year Term.
Timing: 30 to 45 Days to issue LOI; Time to Closing: 90 to 180 days from date of signing LOI.
Pre-sales: There are no pre-sales or pre-leasing requirements.
Future Value: Future value should be at least 1.5 times the original investment.
Background of Sponsor: Project Developer with a Significant Track Record and Financial Strength
Equity Participation: During formal underwriting, the investment fund will determine its equity participation in the project, which will typically be from 10% to no higher than 25%. As such, the investment fund will take a minority interest in the project until completion or stabilization when they will look to exit the transaction via buyout, refinancing, etc.
Typical financing structure: Our funding source provides 100% joint venture equity financing. In so doing, they cover 100% of the total project costs including, in most cases, monies the developer has already expensed for soft costs, pre-development, etc. In other words, they will allow the developer to recover capital that has already been invested in the project by including it in the total financing amount.
Compensatory Balance: By allowing the developer to recover hard and soft costs, the investment fund recognizes that the developer's risk capital will eventually be withdrawn from the project. As a result, they require that the developer place a cash deposit of up to 5% of the project cost in an escrow account. The developer allows the investment fund to draw down up to 25% of the escrowed amount. If, for whatever reason, the developer or the investment fund decides not to proceed, 100% of the full escrowed amount is returned. The escrow is held only until closing and it pays no interest. Current project equity or current monies injected into project will not be allowed in lieu of the required deposit because, in most cases, the developer will be allowed to recover those costs.
Financing Advantages:
• The developer pays no interest during the entire construction period--saving millions of dollars in interest expense;
• Because the investment fund participates as a 100% joint venture equity partner, they assume 100% of the project risk until completion or stabilization;
• When the project is complete, the developer will own the project outright, less the investment fund's minority interest;
IMPORTANT: If you are serious about securing funding, please email us a 1 to 5 page Executive Overview. Thank you. We look forward to earning your business.