With various lockdown philosophies governing different states, the market recovery has not been uniform. However, the capital markets have continued to heat up with anticipation of a return to normalcy being an inevitability. Liquidity returned for select Retail opportunities (necessity & grocery) as well as Hospitality (resort and drive-to leisure), while demand for Multifamily and Industrial continued unabated.
As is the norm when greed trumps fear, the capital markets got out ahead of on-the-ground fundamentals. To fill the gap, new structured financing products continued to make their way into the stack. More cities and states enacted C-PACE legislation, allowing the energy efficiency-focused money to flow into real estate. However, lenders seem to have divided themselves into two camps of philosophy when it comes to C-PACE (not unlike ground leases).
On one hand (primarily), those from the securitization world viewed the whole C-PACE loan amount as senior to theirs and thus reduced proceeds to a target LTV/LTC criteria. On the other end (primarily), balance sheet lenders accounted for C-PACE payments (special assessment taxes) as a long-dated, though temporary, increase in operating expenses and therefore adjusted their sizing on debt yield and/or DSCR hurdles.
This meant that assets that were built to an attractive, untrended yield on cost (6.5%+) could absorb the higher tax assessment and therefore would not have senior loan proceeds reduced.
Our company, sitting at the crossroads of senior debt and C-PACE, takes the viewpoint that C-PACE should be treated as an operating expense. Thus, Eyzenberg GreenCap has partnered with ReedsBay to provide a full-stack solution combining C-PACE with senior debt, adjusted only for operating costs and not for the C-PACE loan amount. We believe that the non-acceleration nature of C-PACE makes it distinctly different than senior debt and therefore should be viewed differently. Read more about this below. – David Eyzenberg (Adjunct Professor at NYU Schack & UM Herbert Business School)
Select completed transactions
$6MM Acquisition | Land | Panama City, FL
Structured and placed a first mortgage construction loan to build the initial 100 units of a 130-unit community.
Eyzenberg GreenCap is a partnership between Eyzenberg & Company and Greenworks Lending, uniquely dedicated to funding commercial real estate transactions through C-PACE. Click here to learn more about the program and your project’s eligibility.
Eyzenberg GreenCap: C-PACE Funding Parameters
New development, acquisition with a heavy renovation component or recapitalization in tandem with a redevelopment of the property
All commercial property types and select alternative asset classes
$1MM-$150MM+, smaller requests reviewed on a case by case basis
No repayment or carry guarantee, completion guarantee burns of at TCO
% to 6.5%, dependent on term, location, use and leverage
Term & Amortization:
Self amortizing (no balloon) with terms up to 30 years (based on estimated useful life of the improvements
90% (combined debt) for new developments / 95% for retrofits
25% of as completed value / 30% of total capitalized budget for new developments (higher for retrofits)
No lockout but subject to a pre-negotiated fee
Currently active in 24 states and D.C. States include: CA, CO, CT, DE, FL, IL, KY, MA, MD, MI, MN, MO, NE, NV, NY, OH, OK, OR, PA, RI, TN, TX, UT, VA and WI.
Reeds Bay Investment Group is an investment management firm specializing in income-oriented investments that leverage our expertise, process, and access to middle-market CRE investments throughout the United States. Click here to view our project guidelines.
ReedsBay: Project Capital for Middle Market Commercial Real Estate
All major property types considered
Primary: Multifamily, Mixed-Use, and Office (select situations)
$1-15 million (larger loan sizes considered on a case-by-case basis)
Up to 85% (additional proceeds available in select situations)
Use: (All include an option for future funded TI/LC and CapEx facility)
Senior Secured Loans
Domestic growth markets and locations with identifiable demand drivers and inventory supply constraints
Variable: Starting at LIBOR + 700 bps with a risk-based floor
Fixed: Starting at 8.0%
Market competitive origination, exit, and extension fees adjusted to loan size, timing, and complexity
6 months to 3 years with extension option available
Prepayment available, subject to fees and/or minimum return requirements
Non-recourse, except for standard carve-outs & carry/completion guarantees
Select completed transactions
$140MM | Hotel | Recapitalization | New York, NY
$6.7MM | Multifamily | Development | Newton, NC
$16MM | Single-Family Rental Housing | Acquisition | Philadelphia, PA
$14MM | Multifamily | Development | Aubrey, TX
$11.5MM | Multifamily | Development | Concord, NC
Select Deals Seeking Developers
$45MM | Multifamily | Development | Pensacola, FL
400-Unit Leasehold Development
$62MM | Multifamily | Development | Bonita Springs, FL
$21MM | Multifamily | Development | Panama City
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 Q1 2021.
Aruyel Nurbekova joined Eyzenberg & Company in 2022 as Junior Analyst. She assists with underwriting, analysis, and financing memoranda preparation for commercial real estate debt and equity capitalization assignments.
Prior to joining the firm, Ms. Nurbekova worked as a Business Valuation Analyst at Ernst & Young company, one of the Big Four accounting firms.
Ms. Nurbekova completed her Bachelor of Science degree in Corporate Finance and Investment Management at KIMEP University in Almaty, Kazakhstan.
D: (305) 995-0777
Mr. Muniak joined Eyzenberg & Company in 2022 to focus on debt and equity originations in his newly adopted home of South Florida.
Mr. Muniak is Co-Founder and Managing Partner at Makal Equities, a real estate investment firm specializing in multifamily, industrial and retail property in Southern California and New York. He invested, sourced, and underwrote all commercial development and investment opportunities during this time. Furthermore, Mr. Muniak’s previous position as Managing Director at a Family Office in New York allowed him to develop his skills as he increasingly became involved in all aspects of fundraising and deploying the fund’s investment mandate. In his career to date he has invested, sourced, and underwrote commercial development and investment contracts, exceeding 100 million dollars.
Furthermore, Mr. Muniak is a Board Member and shareholder of the Mangia Hospitality Group in New York, where he oversees all aspects of fundraising, including the Group’s investment mandates. As a strategic dealmaker, Mr. Muniak is responsible for retail acquisitions & new developments and acts as a liaison with City and State Government bureaus. Due to his established reputation as a key player in the real estate and hospitality industry, Mr. Muniak has managed to build a wide portfolio of bicoastal projects and has worked closely with top developers, entrepreneurs, and restaurateurs nationwide.
Originally from New York City, Mr. Muniak graduated from Johnson & Wales University in Rhode Island, and completed his graduate Business certificate in Sydney, Australia. He is a long-time martial artist and a philanthropist.