Commercial Real Estate Bridge Loans

Continued from previous page...

The goals of the program are based upon the leveling the playing field in terms of equity contributions from the various sources with the TIC plan syndication being the program that moves the project through each level of the structure..

While these are not guarantees for specific project types, they do provide a constructive basis for helping the developer and the investing-public understand the basics of commercial real estate development financing. Notice there is no bridge loan or mezzanine loan in this capital structure. The reasoning is simple; current market conditions suggest the capital available from potential bridge lenders and mezzanine lenders will not be available on a non-recourse basis. If a loan must be full-recourse, the developer is placed in the position of borrowing his/her own money and paying for the privilege. This must be avoided as developers, time in and out, are not the party who has the greatest influence on the project's ability to control events and keep on budget. Only the construction contractor can do that, so the contracting relationship between the project and the general contractor is of the highest importance.

In point of fact, the only way to eliminate levels of construction risk is to lock-in a transaction profile up-front using the design/build contracting process. All other forms of construction contracting do not allocate risk, responsibility, accountability and management in one entity. If a dispute arises in a single-party transaction there may be no up-charge unless the owner is issuing a change order (so control over the change order process becomes very important). When there are multiple parties, assigning accountability becomes convoluted and difficult, leaving the investors and the construction lender exposed to untold losses. This cannot be allowed to occur, so the due diligence review process is a lot more interactive than most developers realize.

It's time you took off the blinders and started taking control of your affairs in a way that creates the kind of strategic partnerships that are a win-win for everyone.

Contact a Rainmaker today and learn what you've been missing out on.

Rainmaker Marketing Corporation is a consulting firm that focuses on providing the due diligence services on a business to business (B2B) basis. Rainmaker Marketing Corporation can trace its roots back to the late '80's and was formally incorporated in 1994.

Over the years, Rainmaker Marketing Corporation consultants have completed hundreds of assignments across the United States (45 states), Mexico, Canada and the Caribbean Basin. RMC's new construction project due diligence documentation services have led to the successful development of income-producing properties valued (in the aggregate) in the billions of dollars.

Take a few minutes and learn more about RMC. This website is designed to provide a wealth of planning information pertaining to the capitalization, operations, and organizational program tenets today's savvy entrepreneurial company must embrace for continued growth and success...