Joint Venture Lending
An investor or capital facility may desire to participant in a real estate investment but not want to do any of the heavy lifting required in real estate developments. Therefore, the investor or capital facility would be more inclined to a Joint Venture opportunity into commercial real estate projects specifically as a provider of capital into the investment asset.
Investors may participate in commercial real estate investments in the capacity of a financier of the asset or simply said being the bank. This investment strategy allows the investor to supply capital into the asset and reap the rewards commensurate to their desired risk-reward level chosen by the investor.
For example, the benefits for the capital providers of debt financing includes being secured by the first trust deed, insured against disaster & catastrophe while providing consistent interest payments. On the other hand, the benefits for the capital providers of equity financing includes a share of the free cash flow dividends with value upside participation. Mezzanine financing is a hybrid of both above financing options, in that it can received guaranteed interest payments as in debt financing, as well as, share in dividends and value upside participation as in equity financing.
Joint Venture – Private Lending
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Different types of structured financing products can cover an assortment of situations the commercial real estate asset may be encountering such as: development & value add construction financing to debtor-In-Possession & Tenants-In-Common financing, in addition to, fixed to floating-rate loans, all of which can be supplied at varying degrees participation and positions with their accompanying risk and rewards relationship along the capital stack. Some of the structured financial products a capital providing investor can participate is include below.
Structured Joint Venture Financing
Debt Financing
Mezzanine Bridge & Junior Financing
Equity & Preferred Equity Financing
Debtor-In-Possession Loans (DIP)
Super Collateralized (Super C) & Triage Financing
Construction Financing
Tenant-In-Common Financing
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