From the Desk of Professor Eyzenberg
The fourth quarter ended with what can best be described as a return to something almost, kind of like normalcy.
Though paling in comparison to the historic (33.1%) bounce back of the third quarter, the fourth quarter still saw better-than-average growth of 4%. With a good portion of the economy still hampered by closures (think restaurants in NYC), there remains a significant runway for additional growth as stifling regulations are rolled back. One must look no further than NY, CA, and IL where government officials moved to relax closure rules heading into the first quarter.
The dust is settling from an unprecedented election season and a change in administration. As we move forward, the real estate industry will need to assimilate to whatever legislative agenda might come. Market participants expect to see 1031 and carried interest on the chopping block as well as an increase in tax rates. On the flip side, we expect to see an increase in funding for FHA and, most certainly, continued support for all things green.
In times of volatility, new capital structures emerge to fill a void. Property Assessed Clean Energy for commercial properties (C-PACE) emerged as a source of rescue capital for assets out of favor, specifically hospitality. Though C-PACE was gaining popularity as an option for retrofits prior to the recent market downturn, the product really shined with asset classes that found themselves cut off from the capital markets. With its ability to be funded retroactively (after improvements have already been made) several years after the fact, C-PACE is a pocket of “found” money for projects in need of a basis paydown, reserve funding, or improvement requirements. Our affiliated entity Eyzenberg GreenCap recently originated just such a loan. More details are provided in this letter’s Proprietary Capital Solutions section below.
– David Eyzenberg (Adjunct Professor at NYU Schack & UM Herbert Business School)
Select completed transactions
PROPRIETARY CAPITAL SOLUTIONS
Eyzenberg GreenCap originates C-PACE financing for new development and heavy renovation, as well as CRE projects where the work has already been done and can be funded retroactively. This capital structure has emerged as a lifeline for the hospitality sector, which has seen itself significantly cut off from the capital markets. Click below to inquire about your project’s eligibility.
$97MM | Multifamily | Development | Miami, FL
400-Unit Leasehold Development
$62MM | Multifamily | Development | Bonita Springs, FL
120-Unit Leasehold Development
$48MM | Multifamily | Development | Greenwich, CT
Real Estate Capital Alliance (RECA) Q1 2022 Production Statistics
Eyzenberg & Company is a proud member of the Real Estate Capital Alliance (reca.us). RECA members arranged over $4 billion in capital in 2020. Below are the complete RECA production statistics for 2020.