Financing for CRE construction projects can be problematic to be sure. The regulatory envelope continues to change. Developers need equity financing today to create enough incentive for them to bring project opportunities forward from the pre-development stage to the pre-construction phase. The pre-construction phase has been by no means a guarantee of outcome. The practical outcome is for the CRE new construction financing vertical to have an end-to-end solution. The current approach is for one firm to do one part of the pie, while other firms all do another. The developer is required to orchestrate this process and more than 4 out of 5 of them are not up to the job. They either do not understand the process or they do not communicate meaningfully enough to navigate the transaction beyond the initial review stage. I don’t think any of these statements are disputable facts.
Our approach focuses on taking the developer out of the leading role for the funding round-up. Once we have completed the Financial Risk Assessment the rest of the process can be made more success prone than failure prone by completing the necessary due diligence reviews (Rainmaker Analytics is listed in the FINRA Compliance Vendor Directory), the buy-side investment banking (i.e.: buy-side broker-dealer), the permanent lender and equity takeout financing, and finally construction financing commitments have the opportunity to be arranged in light of a systemic approach that is intentionally created to provide investment performance assurance as the chief benefit.
The INVIZEN IT platform takes the end-to-end solution even further. Under our solution universe, the program not only provides financial risk assessments but also provides market conditions forecasting, business operations plans updates, business plans for capital financing and investment fraud protections in addition to the continuing program of monthly financial risk assessments that are based upon conventional underwriting benchmarks. The approach is something you can readily see the benefit of utilizing and if your proposed project has a budget in excess of $20 million, perhaps now would be a good time to stop getting rejections and start down a different pathway to success. While there are no guarantees in life of commercial real estate capital financing, you are probably guaranteed to continue to get rejections doing what you have been doing.
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