Posts Tagged ‘sponsor’
Questionable Brokers: Types of Capital
February 23rd, 2010 | 
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Editor’s Note: As the second installment in a three week blog series, Questionable Brokers will posit questions regarding Types of Capital. Last week, the first part of the series examined questions regarding Real Estate Metrics. Next Week week we will wrap up the series with questions Deal Structure. These are real questions from real real estate brokers. Enjoy!
Q: What is the difference between mezzanine debt and preferred equity?
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Posted in Banking & Finance | 
Tags: asset, borrower, capital calls, capital stack, construction loans, credit tenants, deal structure, financing, investment funds, investor, life companies, Llenrock Group, mezzanine debt, ownership, pension fund advisors, preferred equity, real estate metrics, return, reward, risk, senior debt, sponsor, types of capital, upside, yield | 
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eHarmony: Is JV Equity a “Dating Game?”
Editor’s Note: With Valentine’s Day coming up this weekend (order your flowers ASAP!), we figured, why not start off the week with a Cupid-esque topic? We can’t wait to hear your feedback on this one….
When a joint venture partnership occurs in real estate, the term “getting into bed” is often tossed around. And despite the fact that real estate is an industry dominated by men (and therefore subject to more coarse, perverted analogies), this phrase is somewhat appropriate. When you sleep with someone, you want to make sure you are protected (from exactly what, I will leave to the reader’s imagination), right? Well the same goes for your equity partner in a real estate transaction. Yet, while all real estate transaction involve some form of due diligence, JV equity partnerships involve an entirely different level of due diligence.
Rather than scoping out the salient facts of the deal, examining the borrowers track record, and crossing all the “t’s” and dotting all the “i’s” of a particular transaction (like a bank might do), an equity partner has to get extremely comfortable with the sponsor’s style and personality in addition to the aforementioned due diligence. For this reason vetting a JV equity partner has become a lot more like eHarmony than a one night stand. Read the rest of this entry »
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Drop Your Pants…Debt Will Be Cheaper
Bloomberg published an informative article yesterday highlighting the reasons why debt financing is so much more expensive for governments than private companies. You would think that governments that NEVER default on debt issuances and have unlimited tax revenue could issue debt at a cheaper cost than private companies. Municipal bonds, however, are often issued at rates anywhere from 100 to 150 bps higher than private companies. What’s the reason for this? Moreover, what lessons can an owner/investor of commercial real estate learn about debt financing from the municipal bond market?
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Posted in Banking & Finance, Owners & Developers |
Tags: bonds, cheap financing, creditor, debt, debtor, interest rates, muni bonds, municpal bonds, perception, Rishy Mehrotra, risk, sponsor, transparency, yields |
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