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Message from Jonathan Kieswetter
President, Grace Capital Group
If you haven't already noticed, there is an enormous amount
of capital flowing into the real estate market via debt, equity
and mezzanine structures like I've never seen in my 28 years in
the business. Also, we see terms getting better and leverage pushing
higher, as capital providers vie for residential and commercial
real estate projects.
Here are a few capital providers worthy of mention:
- A
brand new Los Angeles based private fund just got it's second
investment from it's institutional partners taking it's fund up
to $1 billion for non-recourse debt, leverage to 90%, simple approval,
very quick, non-bank regulation environment, priced LIBOR ±
300bp for bridge loan and mez opportunities.
- A
German bank has just opened shop in California as a one stop shop
for debt, equity and mez financing structures with loan costs
up to 95% on un-entitled land, land development, condo conversions,
commercial projects, construction loans and bridge loans.
- A
union labor pension fund is providing equity for commercial real
estate up to 100% of costs, guarantee of the senior loan and no
"pref rate" or "look backs" on it's investment,
only pari passu returns.
- A
New
York REIT is looking for credit tenant purchase opportunities
nationwide, but in particular needs west coast projects. Grace
Capital just sold a Lowe's & Michael's store to this REIT
at an aggressive cap rate which resulted in the highest price
attainable in the market.
Inspiration
Under this covenant of justice, liberty and union we have become
a nation - prosperous, great, and mighty. And we have kept our freedom.
But we have no promise from God that our greatness will endure.
We have been allowed by Him to seek greatness with the sweat of
our hands and the strength of our spirit. In each generation, with
toil and tears, we have had to earn our heritage again. If we fail
now then we will have forgotten in abundance what we learned in
hardship: that democracy rests on faith, that freedom asks more
than it gives, and the judgment of God is harshest on those who
are most favored.
-- Lyndon B. Johnson
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Recent Closings
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Acquisition Financing
$13,200,000
Non Recourse Debt
LTV 70%
Less than 30 days to fund
Four Working Farms to be Subdivided into Residential Communities
Pinal County, Arizona
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Joint
Venture Advisory Services
$70,000,000
5 Un-entitled and entitled parcels
Land
owner had exhausted their capital base and experience level
to process a huge 2,500 acre parcel. A builder was brought
in as a development and capital partner, which enabled the
partnership to acquire adjoining parcels, to increase the
scope of the project and provide necessary water rights.
Sparks,
Nevada
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Land Acquisition Financing
$6,141,000
Commitment received in 1 week.
Financing provided to Debtor in Possession to acquire a bankrupt
Golf Course built on a landfill to be subdivided into 750
SFR Units. For almost a year the developer could not find
a lender that would lend on a landfill project.
Houston, Texas
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Refinance
$900,000 with Cash Out
5
Year term
Schoolhouse Building
Palm Desert, California
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Land
Acquisition
$5,200,000
100% Purchase Financing
Non Recourse
Un-entitled land
that will be subdivided for a residential community.
Lake Elizabeth, California
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