Rainmaker Marketing
Corporation provide a full range of retail industry due diligence documents
including retail project
capital finance plans, retail project financial
feasibility studies, retail project market
feasibility studies and entitlements
reviews for new construction projects nationwide. Rainmaker's approach
to the creation of capital finance
plans is to insure the underlying assumptions are in fact indicative of the
project's surrounding primary marketing area. The emerging capital finance
plan document is a summary (less than 30 pages as a rule) of the most relevant
factors. The 12 most relevant factors that every capital finance plan
proposal must address are covered in the following 12 questions (click on each
topical link for technical discussion):
-
Who
will we be doing business with?
The
investor needs to know enough information about the sponsor/developer to run
a background due diligence check of legal filings to determine the legal
capacity of the sponsor/developer to be bound to executed contracts.
-
What
market and what business model and why?
The
investor needs to know what the scope of business activities will be for the
new development. This includes identifying the business model, primary
marketing area and project location. (back to top)
-
What
risks does an investment require us to endure?
The
investor needs to know the scale and types of subjective investment risks
the project, investors and/or lenders will be exposed to and how the
developer/sponsor will manage these risks to their advantage. (back
to top)
-
What
are the rewards?
The
potential rewards must be fully defined and the discussion must include the
distribution formulae, timing and analysis in terms of the investment's
potential performance. The initial analysis needs to focus on
available statutory entitlements that can be used to bolster returns when
cash flows from operating activities are not otherwise available. (back
to top)
-
When
and how will my reward be given to me?
The
timing must be clearly delineated in a key milestone schedule and analyzed
on an aggregate and investment unit basis. (back to top)
-
Who
is on the team and have they done this before?
The
document must clearly present the entirety of the project team including the
developer, property management, contractor, architect, engineering firms and
specialties. Sufficient information needs to be provided to allow the
investor to undertake their own due diligence investigation into the
capabilities of the team members. (back to top)
-
What
are we developing and when will it start making money?
The
project must be clearly presented in terms of its cash flows for the
pre-construction phase, construction phase and post-construction
phase. Sufficient detail regarding the construction program, materials
and systems must be provided so the investor can conduct an independent due
diligence analysis (or audit) to determine the veracity of claims. (back
to top)
-
If
I need to get out of the deal is there a way out?
The
exit strategy for investors and lenders must be fully described. If
the intention is to rely upon realestateplays.com to relist and remarket the
interest, then consult with Rainmaker Marketing Corporation regarding this
entry. (back to top)
-
What
rights and entitlements will this investment give me?
The
summary must clearly describe what issues may be brought to bear regarding
the use of incentives and how these will be impacted by the relative success
or relative failures of the proposed project. (back to
top)
-
Are
all parts of the capital funding plan accounted for?
The
plan must address all of the key issues surrounding the capital stack.
Each source of funding must be clearly delineated together with a
presentation of the factors for obtaining the stated investment and the
factors that would prevent the project from receiving the stated
benefits. (back to top)
-
What
risks apply to the capital funding plan?
The
document needs to provide an analysis of the risks that could impact the
financing of the proposed development and how the developer/sponsor intends
to manage the program to the advantage of the investors. (back
to top)
-
What
is the timing for the opportunity?
Timing
is everything. An overall key milestone schedule must be provided that
covers the development program from the pre-construction phase through to
the point of completion and ultimate operations wherein the project is fully
stabilized in the market. (back to top)
For more answers,
contact a Rainmaker consultant today and take advantage of our free initial
consultation.
