CRE Developer Co-Investment: What’s Required for Financing

Co-investment lives or dies on risk management.  This requirement not only applies to the nature of the market opportunity but also applies to the developer’s ability to demonstrate proactive execution risk management documentation.  Reputation, experience and credit may not be enough in and of themselves.  Comprehensive business operations planning, risk mitigation plans and related measures are a fundamental requirement … More CRE Developer Co-Investment: What’s Required for Financing

Shooting the Gap: Mezzanine & Preferred Equity Financing for CRE ADC Projects

The reality that is playing out is a huge window of opportunity that has been created for preferred equity and mezzanine loan funding participants in the market, as they have cashed-in to fill the void created by many commercial institutions exiting the market for new construction loans for all but their well-heeled customers.  The initial profit-taking bonanza this created for alternative lenders is starting to unwind … More Shooting the Gap: Mezzanine & Preferred Equity Financing for CRE ADC Projects

CRE Construction Financing for Projects Over $20 Million

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.  … More CRE Construction Financing for Projects Over $20 Million

Key to the Kingdom: CRE Development Equity Financing

The amount of investment capital flowing into the market has included an incredible amount of capital investment in CRE properties in private placement offerings of equity securities in Direct Participation Program transactions.  The demand has reached a crescendo for investment in acquisition financings and now we are running out of product.  That’s where the equity financing for CRE development transactions becomes a real issue that requires a real solution but the developer has to do it in reverse order. … More Key to the Kingdom: CRE Development Equity Financing

The Failure of CRE Investment Loss Mitigation in the Analytics Age

More than $500 billion in CRE loans and investments are expected to be realized this year, worldwide.  That’s an astounding number.  CRE investment loss mitigation practices have not proven to be up to the task (otherwise, the losses would be a lot less, wouldn’t they?).  … More The Failure of CRE Investment Loss Mitigation in the Analytics Age

Time is Money: Bridge & Mezzanine CRE Lending Opportunities for CRE Properties & Projects

Time is money.  We all know that CRE deals come with a built-in self-destruct mechanism in the form of the feasibility period commonly associated with every real property acquisition agreement.  The promoter has to get enough due diligence completed to justify the contract going hard or closing on the land or exit the deal and eat a capital loss.  Historically, mezzanine and bridge lending has been largely ignored due to the higher interest rates associated with these funding products.  While it is true these funding products cost more, a closer look may reveal that cost may in fact be negligible compared to the cost to capital associated with a lost opportunity. … More Time is Money: Bridge & Mezzanine CRE Lending Opportunities for CRE Properties & Projects

Unwinding the Complicated & Conflicted Compliance Conundrum

The regulators are after still after you.  Whether your business is being beat up by FINRA regulations, the Basel III  Accord or some other regulatory body, the desired impact is all the same – the regulators are here.  They are tired of dealing with the investment fraud complaints, the lack of reporting transparency that allows investment fraud to thrive, and they are going to take a pound of flesh. … More Unwinding the Complicated & Conflicted Compliance Conundrum

The Market Test: Why Capital Financing Success is so Elusive

Changes in the market are inevitable and it is just not possible to project market conditions beyond the 2-year window with any amount of certainty that is worth betting investment dollars upon in today’s capital markets.  The reality is that you can’t expect to manage the myriad of market risks by simply conducting a market analysis once a year or once a quarter on an ongoing basis.  If you are going the private placement offering route (i.e.: seeking capital through the broker-dealer market) the compliance requirements of FINRA and the SEC for due diligence demand a whole lot more … More The Market Test: Why Capital Financing Success is so Elusive

The Emperor Clothes: Credit Risk Underwriting

Credit risk underwriting has become an extraordinarily complicated process for business lending and investment.  Books have been written about it.  Banks spend fortunes on trying to manage it.  Everyone in finance has been taught the importance of it and yet it remains a pivotal element in the search for the Holy Grail – the reduction of investment/loan loss severity risk. … More The Emperor Clothes: Credit Risk Underwriting