We are seeing commercial real estate (CRE) lending transactions getting quoted and funded at a blend of rate and terms that were not even possible in the Glory Days of 2005-2006! Capital is loose and flowing once again. Now is the time to lock these lenders in a room and grab their money before market conditions change.
We have relationships with unique, proprietary, “High-Octane” sources of capital that can lever to 85-90-95% of the capital stack to include:
- Purchase price
- Soft costs (closing costs, transactional costs, 3rd party reports, interest carry, etc.)
…. for value added income producing commercial real estate projects. A critical change over the last three years of the financial recovery is that interest rates for high octane capital is now in the 4’s and 5’s as investors search the world over desperate for a reasonable yield on their money for the risk they are taking. Just two short years ago the blended rate investors wanted to deliver 85% leverage was in the 9-10% range and required a combination of senior debt and mezzanine debt / preferred equity. Leverage to 85% of cost is now available as a single loan on a NON-RECOURSE basis to experienced sponsors.
More good news… we are seeing leverage of up to 95% of cost available using a combination of senior debt and preferred equity. Experienced sponsors now only need to contribute as little as 5% of cost for properties that can evidence an increase in value through capital improvements and better management. Preferred properties include:
- Luxury Market Rate Rental Apartments
- Workforce Housing
- Senior Housing
- Student Housing
Investors are focusing on income producing rental housing first and foremost. Other income producing property types such as hotels, retail, office and warehouse/flex/industrial will get a look from investors, but are not being as enthusiastically sought after as rental apartments. Leverage like this does not yet apply to “liquidating assets” such as residential subdivisions, for-sale townhomes or for-sale condo projects. It may happen next year or the year after, but for today all the actions is in income producing assets.
Our capital relationships span the spectrum of capital and include:
- LifeCos and Pension Funds
- Alternative Portfolio Investors: Private Equity, Hedge Funds, Family Offices and High Net Worth Clients
- Agency: Fannie, Freddie and FHA
- EB-5 – We have an investment mandate from a consortium of EB-5 Regional Centers to source projects in which our investment is $10+ million into projects that can create or retain jobs in NJ, PA, FL, GA, NC, SC, TX, CA and Puerto Rico. We can provide Mezz/Preferred/Gap Equity and lever up to 85 to 90% of cost. We will consider projects outside our footprint if we can fund $20+ million. We are interviewing developers with experience operating and managing Multifamily Rental Housing, For-Sale Condominiums (not single family subdivisions or town homes), Senior Housing (CCRC, ILF, ALF, ALZ), Hotels/Resorts/Casinos, Urban Core High Density Mixed Use projects and Build-to-Suits.
If you have a transaction to discuss, please start by sending a summary of 8-10 high-level bullet points to moc.laicnanifnosibnull@evad
Bison Financial Group is an entrepreneurial firm advising real estate investors, developers and turn-around artists that buy, build, sell and finance commercial real estate. Bison has developed distinct expertise in the acquisition and finance of distressed properties with tremendous upside potential. Bison welcomes opportunities to share our track record with potential equity investors, debt providers and clients.