CAPITAL STRUCTURE: CONSTRUCTION LOAN / PERMANENT LOAN / PARTICIPATING LOAN
An international fund manager is deploying rare participating debt investments out of its multi-billion open-ended fund.
Check size: $20-$200MM
LTV: 90%
Rate: Current pay rate of 5-6% with 50% operating cash flow participation post debt service
Waterfall: Upon a capital event:
Repayment of mortgage
Preferred return of 7-9% to lender
Return of borrower’s equity
Preferred return of 7-9% to borrower
50/50 share thereafter
Term: Closed to pay off after 5-7 years
Property type: Multifamily, Industrial, Office, Retail, Student Housing, Hospitality, Self Storage
Uses: Acquisitions