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| | Commercial Real
Estate Offering Memorandums - Continued...
The steps to the creation of a private placement
offering memorandum for a commercial real estate development program always
follows the same track using a "building blocks approach:
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Market Study. Everything starts with
the market because we live in a market economy (capitalism) where consumers
(i.e.: the potential end-users of the product or service) pick the winners
and losers based upon the consumers' purchasing habits. Accordingly, businesses
seeking capital investment must have independent proof that a market demand
exists for their new business. |
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Financial Feasibility Review. The key
data findings and conclusions of the market study provide the empirical
assumptions to create a pro forma financial presentation that is based, more
or less, on the current business reality of the market. The outflow of
the pro forma financial presentation is to demonstrate that, the economics
set forth in market study, are in fact of sufficient magnitude to support
additional business development. |
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Owner's Program/Business Plan. The next step is to
create the business plan of operations based upon the stipulations and
limitations demonstrated in the market study and the pro forma financial
presentation. The key points become the "Owner's Program" -
the document that sets forth the goals, requirements, means and methods by
which the business model will be developed, financed and operated on an
ongoing basis. |
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Capital Funding Plan. The output of the
market study, pro forma financial presentation and Owner's Program
information is utilized to create a capital funding plan proposal; the true
core of the private placement offering process where all elements are
analyzed in situ and in terms of the other elements. |
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Third-Party Reports.
All third-party reports that have a material bearing on the pending offering
are garnered and incorporated into the appendix of the document. |
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Draft. A draft of the
proposed form of the private placement offering is then created and provided
for comment. |
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Reviews. Finally, the
review by legal counsel and the resulting legal opinion of certain
organizational documents, tax opinions and related documents are put into
the offering and the completed document is ready to go. |
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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? |
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