For larger equity requirements ($5,000,000-$50,000,000) or more complex transactions, eCAP can provide up to 90% of the equity required for the development of income properties – including single-tenant net-lease (“STNL”) properties, apartments, senior housing, student housing and multi-tenant retail.
Deal structures typically involve a preferred return to eCAP plus a participation in the profits of the deal at sale.
For single-tenant net-lease (“STNL”) development, eCAP can provide 100% of total development cost (“TDC”) funding for solid credit-rated tenants and up to 100% of TDC funding for unrated corporate tenants and/or strong franchisees on a case-by-case basis.
eCAP’s capital is structured as a loan to the developer, who provides personal and/or corporate guarantees for (typically) the full amount of eCAP’s investment.
eCAP’s investment is not secured by a first lien/mortgage on the property.
At land closing, the developer is reimbursed for their pursuit and predevelopment costs expended to date.
eCAP will fund a portion of the developer fee during the development process.
Rates and terms are determined based upon the creditworthiness and market demand for the tenant, the developer’s experience, etc.
For developers of single-tenant net-lease (“STNL”) properties, eCAP can provide developers with 100% of total development cost (“TDC”) financing through a “Forward Purchase Contract” that is funded in phases throughout the development process.
Prior to land closing, eCAP and the developer agree to a purchase price for eCAP to buy the property.
By preselling the property to eCAP, the developer locks in their profit while eliminating construction loan liability along with interest rate and market/sales risk inherent in typical development deals.
eCAP closes on the land in their name and funds construction draws just as a regular construction lender would – without the developer having a liability on their balance sheet.
The developer is reimbursed their pursuit and predevelopment costs at land closing and paid a portion of their agreed-upon development fee during construction.
Upon Certificate of Occupancy and occupancy by the tenant, eCAP reconciles any remaining amounts due the developer from the agreed upon purchase price.