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Commercial Real Estate
Syndicates...
Rainmaker provides
national and international support for commercial real
estate syndications via the Tenants-In-Common ("TIC")
fractional ownership syndication approach providing the gap funding requirements
(difference between total project cost and the construction loan
origination amount) for commercial real estate development financings
and commercial real estate acquisitions. In today's competitive capital markets, commercial
real estate syndications provide the individual investor with access to
the same types of assets and/or commercial real estate development
programs that Qualified Institutional Buyers routinely receive.
That's right - the object is to level the playing field for individual
buyers and institutional buyers alike through the listing process so
that your $250,000 purchase accesses the same commercial quality interests that
Qualified Institutional Buyers (called "QIBs" - pronounced
"quibs") routinely receive.
The rules of the road are
as follows:
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Holding Periods &
Hurdle Rates. TIC Plan-based syndications can be used for pre-construction
phase project financing, construction
phase project financing and post-construction phase project
financing (permanent financing and/or take-out financing). The
holding period is adjusted for risk on the basis of the following
multiples being provided over the S&P 500 trailing 5 year
earnings (i.e.: a hurdle rate range of 10% to 14%):
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Pre-Construction
Phase. Multiple of 1.75 to 2.75 times the SPDR hurdle rate
with a 3-year holding period.
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Construction
Phase. Multiple of 1.50 to 2.50 times the SPDR hurdle rate
with a 3-year holding period.
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Post-Construction.
Multiple of 2.50 and up times the SPDR hurdle rate with a 7-year
holding period.
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These hurdle rates
are subject to the supply and demand for the commercial real estate
syndication market. Prospective purchasers and developers will decide
what the returns potential has to be in order for a project to
acquire all the necessary development financing (or acquisition
financing) to allow a given project (or market
basket of projects) to move into actual
construction.
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Contract. The minimum real estate syndicate contract is $250,000 and can be rolled
into an Individual Retirement Account (IRA) using an option feature
to defer taxes and lock-in gains. This means your expected
minimum purchase is $250,000.
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If
you are seeking development financing for your project, consider the benefits of
the zero-coupon fractional ownership interest commercial income-producing
property syndication approach can provide:
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The
financing is non-recourse and the sufficiency of the financing
allows the developer to knock down the construction mortgage
financing loan's LTV Ratio to a point where a commercial bank
can be induced to provide the required construction loan on a
non-recourse basis and with a waiver of the cross-default and
cross-collateralization pledges. |
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The
zero-coupon financing can close while the project is still in
its pre-construction phase and the marketing window can be as
short as 21 days. |
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The
zero-coupon financing approach provides long-term (typically a
holding period of seven (7) years) financing so the developer
can get the project built, open and stabilized before the
developer has to worry about retiring the syndicate's position
in the deal. |
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The
zero-coupon financing approach does not require the developer to
accept a dilution of the developer's equity interest in the
resulting business. |
This
discussion continues on the next page.
Talk
to one of our consultants to get more information.
About Rainmaker...
Rainmaker Marketing Corporation is the
brainchild of Clint Lovell, a seasoned business finance consultant with
more than 20 years experience. Rainmaker is a B2B consulting firm that was incorporated in 1994 for the
purposes of providing market feasibility studies to businesses
seeking capital financing in the commercial and institutional
markets. Today, Rainmaker Marketing Corporation provides a
comprehensive array of due diligence documentation services for most
major industry groups. Rainmaker Marketing Corporation also
provides syndication management services for fractional commercial
real estate syndicates that can provide mezzanine gap funding for
income-producing commercial property developments as early as the
pre-construction phase. Rainmaker Marketing Corporation serves
clients throughout North America and the Caribbean Basin. Rainmaker
Marketing Corporation, Inc. 15519
Dawnbrook Drive, Houston, Texas 77068
© Copyright,
2009 Rainmaker Marketing Corporation, Inc. All rights
reserved. |
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A
Few Words on Change...
Clint
Lovell, the Managing Principal of Rainmaker, has written a book on the
subject of capitalism and the creation of a new economic society that
ends our reliance on taxation and retires all of our national
debt. The book is called The Fix and you can order an
advance copy now at www.the
fixbookstore.com. Order today and we'll pay your shipping,
saving you some real change. |
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What's
New...
Read
our latest whitepaper on capitalization strategies and commercial real
estate syndications that provide developers with a new arsenal of
capital finance weapons they can deploy in the middle of this
recession. Click here and download the whitepaper
free! |
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