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For retail developers, the
availability of retail project construction financing is a matter of the
greatest importance. Most of the retail project construction
financing in the U.S. has (historically) been controlled by major commercial banks. The
commercial bank has an understanding of the local market conditions, can
get to the property on short notice and provide a higher level of due
diligence investigative capacity than most of the other players in the
construction phase project financing continuum. 
That is the way things were done in the 20th
century. The 21st century is a business climate dominated by the
near instant availability of information pertaining to market and
program development issues. The result has been a dramatically increased role for institutional
investors in the commercial real estate development arena in general,
and the retail property market in particular.
Institutional offerings typically provide a much higher
loan-to-cost ratio for the interim loan than is the norm for commercial
bank loans. In addition to the typical institutional private
placement offering route, there is the potential to file and create a
TIF Plan or CDD Plan to provide interim financing.
In any case, the interim funding requirements require the
developer to (at the very least) undertake a comprehensive investment
incentive entitlement review that includes the availability of one (or
more) local, state an/or federal statutory incentive. The most
common route at the local government level usually focuses on a TIF
Plan. Having said that, consideration must be given to the
following entitlements:
-
New
Markets Tax Credits
-
Brownfields
Tax Credits
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Historical
Tax Credits
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Bonus
Depreciation Expense Allowance
-
State
"Piggy-Back" Tax Credits
-
State
Grants/No-Interest Loans
-
Federal
Loan Insurance
-
Federal
Loan Guarantees
-
Federal
Direct Loans
Rainmaker
Marketing Corporation can be your "one-stop shop" for
entitlement reviews at the local, state and/or federal level. Our
consultants have a national reach and a local understanding of the
issues and opportunities that commercial developers need to have as part
of their project's proposed capital funding plan structure.
Finally,
have you considered undertaking an equity raise using the fractional
real estate ownership interest syndication (tenants-in-common based real
estate offering) to raise equity contributions as early as the
pre-construction phase? We have. There is an orderly market
opportunity for projects having total development budgets of at least
$2.5 million.
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