Joint Venture /
Equity Financing

Over the last several years, the real estate market was flush with equity capital. Today’s equity dollar is much harder to find and is more risk adverse than ever. Compelling projects entail preleasing and/or a distressed element in which the cost basis of the property is significantly below replacement. Risk adjusted returns are in excess of 20%+ IRRs with minimum equity multiples of 2x. Sponsors must demonstrate a proven track record and a commensurate balance sheet. Although several equity sources have left the market, CCP has identified and established relationships with a variety of new capital providers. When combined with our long standing players, CCP can offer a tailored solution to your joint venture equity needs. CCP’s usual and unusual providers include:

  • Hedge Funds
  • Wall St.
  • Opportunity Funds
  • Life Companies
  • Pension Funds
  • Endowment Funds
  • Commercial Banks
  • High Net Worth Individuals
  • Private funds

Equity can be structured in a variety of formats. Normally a preferred return of varying rates is applied based on the risk level of the transaction. After capital is returned, profit splits are based on different payback scenarios. Most typical is a waterfall scenario where the investor gets back a higher percentage of profits until a desired internal rate of return is achieved, after which, the ratios flip-flop in favor of the developer. Most investors have flexibility in structuring these transactions and equate an overall IRR with the risk level of the transaction.

Closed Transactions

Borrower was looking for Joint Venture Equity and Credit Enhancement on Infill Multifamily Development:

  • 65% Loan to Cost Construction Loan
  • Libor + 3.25%, Non-Recourse
  • JV Equity funded 95% of Total Equity Requirement
  • Urban Infill 275 unit project
  • Institutional Investor
  • 1.20 DCR

Loan Amount: $25,000,000
Loan Type:       Joint Venture Equity: Apartments
Loan Location: Southern California

Borrower was looking for Joint Venture Equity and Credit Enhancement on Infill Multifamily Development:

  • JV Equity funded 95% of Total Equity Requirement
  • $75,000,000 Total Cost
  • 10% preferred return, 35% Promote
  • Urban Infill 225 unit project
  • Institutional Private Equity guaranteed the construction loan

Loan Amount:$20,000,000
Loan Type:       Joint Venture Equity: Apartments
Loan Location: Southern California