Banks Are Closed But This Alternative Form Of Financing Is Looking For Deals!
The market was super frothy literally 2 months ago…but a lot of things happened in those two months.
If you had a deal lined up, or a note coming due or were even in the middle of construction and need to find another source of capital then we have an option for you to explore.
Since banks aren’t lending we’ve been working with a company that is bullishly looking to deploy funds through ground lease sale leasebacks.
Their program is pretty straight forward; they get an appraisal of the subject property and will buy the dirt for 30% of the total property value secured by a 99-year ground lease.
This structure has been a common practice in places like New York City for a long time and is a well known and vetted model.
This capital source has informed us that they’ll look at all property types and all assets including partially completed projects. For example, now a boutique hotel that lost their bookings due to the travel freeze across the nation, or a partially built retail center can get the capital they need to keep going while everyone weathers out this storm.
Basically, if you’re short on cash and need to some runaway to ride this out this could be a great option.
Their criteria:
- Deal Size:
- $3M – $30M Ground Acquisition ($9 – $100M Total Property Value)
- Ground Lease Acquisition Price
- 30% of the appraised value
- Property types:
- Apartments
- Industrial
- Hotels
- Retail
- Office
- Partially completed construction projects
- Rate:
- 5-6% cap rate against the purchase
- Term: 99-year ground lease
- Option for Early Buyout During Lease Term
If you are in an industry or have an asset type, that has been affected by the coronavirus this financing type can help. Send us at Justin@encapital.com or by clicking here and let’s start chatting today!
