CCRC Consultants
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The senior housing
industry offers the entry-fee housing developer with a unique
opportunity - the sale of fee-simple interests and entry-fee estate
interests for the same living unit. That's right, you can sell the
same living unit twice. This creates the opportunity for the
developer to divide the project into two (2) distinct development phases
and retire all the construction debt in the first phase, thus providing
the second phase construction lender with a much higher level of
collateral support (and commercial banks are never satisfied with the
collateral pool) than can otherwise be contrived.
Take a moment and
consider this impact: you develop the first phase and pay off all
debt. You develop the second phase and allow the debt to start to
pile up, while you pocket entry fees. The project is completed and
has a resulting debt/equity ratio that is much stronger. This
makes the resulting sale of the project a huge capital gain for the
savvy retirement housing developer. This means the payback period
for the developer/sponsor is moved closer to the front-end of the
development spectrum, thus dramatically increasing the developer's
internal rate of return on the developer's capital investment.
This gives the sponsor
options that, heretofore; were not possible to consider. Now add
in the commercial real
estate syndication of fractionalized real property interests and
things get really interesting. If the syndication is in fact
successful and closes at the minimum sales level (usually $7,500,000)
then it will continue to be listed and offered until it is sold
out. The sell-out results in the developer being able to retire
all of the construction debt (including mezzanine
loans, bridge loans and
hard
money loans, if needs be) and eliminating the investor's exposure to
bankruptcy risk and foreclosure risk.
When was the last time
you saw a higher-yielding investment that insulated the owners from
bankruptcy risk and foreclosure risk?
Time to talk to Rainmaker
Marketing Corporation and get all of the facts.
