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Most experienced commercial
real estate developers routinely acquire funding via the private
placement securities offering method, wherein; the developer/sponsor
(can also be different entities) becomes a securities issuer pursuant to a
private placement securities offering subscription process that is not the
subject of a general solicitation (hence the term "private
placement"). The developer can issue either debt securities,
equity securities, hybrids and convertible securities or some derivative
thereof. The private placement offering is usually undertaken with
the assistance of a commercial investment banking firm that has enough
Qualified Institutional Buyers (or "QIBs" - pronounced "quibs")
to syndicate the issue, but the term, "syndication" can mean
different things to different people, so it is important to understand the
alternatives because they bear directly on the fortunes of the
developer/sponsor. In
terms of a securities float, the syndication process is managed by the
investment banker. The investment banker promotes the transaction
through the investment banker's own rolodex of QIBs and through obtaining
additional sales syndicate support from other investment banking firms to
quickly and efficiently close-out the issue. This takes time,
involves a "road show" where the developer/sponsor and
investment banker undertake lengthy teleconference presentations and
attend presentation meetings for the purposes of qualifying the
participation of interested QIBs in your project's securities
offering. This has to be completed in light of state and federal
securities regulator requirements. On
the other hand, the real estate sales syndication approach does not
require a private placement offering memorandum be drafted and does not
require the services of the investment banker. Rainmaker Marketing
Corporation can be your prime commercial real estate investor via the
tenants-in-common approach (commonly called a "TIC Plan" - as in
"tick plan") and then resell the units to interested buyers on a
direct basis. There will be some units sold for which the
developer/sponsor does not receive funds. These constitutes a
measure of cost and profit that Rainmaker Marketing Corporation seeks to
make on every syndication transaction. The syndication approach is
probably faster and more to the liking of new commercial real estate
developers seeking financing for their first commercial real estate
development project. The Rainmaker Marketing Corporation syndication
platform may end up being the most cost-efficient investor syndication
available for these projects and developers. All
syndications undertaken by Rainmaker Marketing Corporation must conform to
the following:
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The developer/sponsor
must own the proposed project site in fee-simple title.
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The total project
budget must be greater than $2,500,000.
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The due diligence
documentation must be completed and provided for Rainmaker's review
and acceptance.
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The entitlements review
for local, state and federal investment incentives must be completed.
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The new capital funding
plan is created.
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The syndication
"goes live" with a 90-day initial window of market exposure.
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Each TIC Plan
fractional ownership interest in the syndication plan shall be for
$2,500,000. The total float equals the total budget divided by
$25,000. There are no partial units, but additional units are
added to pay Rainmaker's cost and profit expectations, the majority of
which, are held in units in Rainmaker's portfolio.
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If the initial 90-day
market exposure results in $2,500,000 or more sales, then the
developer/sponsor is obligated to take the financing and close.
Syndication sales will continue (if successful) until the entire issue
is sold out.
For more information
contact Rainmaker and get the complete picture in your mind and get ready
for excitement to enter into your project's life.
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