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Private Activity Bond Financing - The Power To Build...

A private activity bond financing (also referred to as a "PAB") typically takes the form of a tax-exempt construction and private activity bond financing, PABs permanent financing wherein an authorized issuer (within the state where a commercial real estate development project is located) provides the necessary access for the developer/sponsor for construction phase and permanent mortgage financing.  All private activity bonds are authorized via a change in the Internal Revenue Service Code enacted by Congress as an exception to taxation that a specific state may offer.

In general, PABs are a federal entitlement where (in most cases) the amount of PAB authority granted to each state is based on a per capita formula for the purposes of making the entitlement fair and reasonable.  Once the PAB has been authorized, the corresponding state bond commissions adopt rules pertaining to the application and approval of projects and issuers.  Once the rules are promulgated, you may seek out an authorized issuer.  The authorized issuer is the entity that actual issues the bonds and receives the net financing proceeds that, in turn, the issuer then lends to the developer/sponsor's project via a loan agreement that is part of the bond indenture.

In many cases, the provision of additional PAB authority is attached to a specific area that is blighted or has suffered a major disaster.  In recent years, these additional PAB financing have been made available for disaster relief for areas impacted by the 9/11 attacks (the "Liberty Zone"), Hurricane Katrina, Hurricane Wilma and Hurricane Rita disaster areas (collectively, the "GO Zone").  Congress now uses the "GO Zone" nomenclature to describe any area requiring federal assistance to recover from a given natural or man-made calamity.  Examples of qualified project types that have been authorized in the past include:

Senior housing development projects.

Hotel and motel development projects.

Healthcare development projects.

Mixed-use development projects.

Retail development projects.

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Do You Know The Secret?

When it comes to commercial real estate development finance, it doesn't matter whether you need to raise $5 million or $50 million, the out-of-pocket costs, advance fees and project due diligence costs will always require the same relative investment dollars the promoters have to fund.  Do you know what that amount is?  Do you know the Secret?

Rainmaker Marketing Corporation can trace its history back all the way to 1989.  Incorporated in 1993, Rainmaker Marketing Corporation has evolved over time into a full-service business to business consulting firm.  Rainmaker Marketing Corporation’s initial specialization was in issues and documentation needs corresponding to the capital funding cycle for commercial real estate development projects with a primary focus on senior housing and health care related properties.  Today, Rainmaker Marketing Corporation serves all types of commercial income-producing property development program financing requests with a combination of feasibility studies, due diligence services, structured finance consulting and a focus on commercial real estate syndication services.  Rainmaker Marketing Corporation’s service area includes all of the continental United States, Canada, Mexico and the Caribbean Basin.

281.537.1200

Email: consultants@rainmakermarketing.com

Commercial Real Estate Development Finance, Due Diligence Documentation, Syndication & Project Management Consulting

15519 Dawnbrook Drive, Houston, Texas 77068.

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