Impact Focused Promotion in Advance of Offering Election…
Commercial Real Estate Financing in the New World
Lending is now the last piece of the capital stack to consider. It’s been rendered moot for all but the biggest commercial real estate transactions.
For project budgets of less than $75 million, commercial real estate lending represents an expensive luxury that serves no purpose.
The change in the capital markets heralded by the SEC’s landmark securities regulations change in November 2020, makes commercial real estate lending an expensive and laborious process you can afford to do without.
Overview of Accelerator Program Key Points
Up to $75 Million in Non-Recourse Financing
Obtaining commercial real estate construction financing for projects having a capital budget of less than $75 million no longer requires you to go begging to the bank as your primary means of obtaining financial investment leverage. The new market rules drastically change the probability of success odds away from lending altogether.
Bank Lending Offers Lousy Probability of Success Odds…
The truth is that the probability of success with commercial banks, local banks and credit unions pale in comparison to the probability of success odds owing to quasi-public offerings authorized under the new securities regulations (1 in 5.55 odds for the banking industry versus 1 in 1.47 odds for crowdfunded offerings).
Bank Lending Costs More & Provides Less…
The pre-issuance out-of-pocket cost expectations are about half that which attends commercial real estate lending, and the timing expectations are about the same or better. Of course, you may still like going with your hat in your hand to beg at master’s doorstep, sign away your life as the bank’s servant or be constantly jerked around until you are ready to scream. Those options are still available to those who have poor math skills.
Commercial Real Estate Financing Gets Easier When the Odds Are in Your Favor
For the rest of the commercial real estate market, perhaps a refresher course in computing probabilities would be in order, followed by a consultation on how to use this tool for your particular project. Once you have realized these fundamental truths, the odds will ever be in your favor.