Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.
Family Office Managed by Experienced Developer Providing Non-Recourse Multifamily Construction Loans
This family office, experienced in multifamily development, provides non-recourse construction loans for multifamily asset classes and select flagged hospitality transactions. Geographic focus is on primary and secondary markets throughout the US but they typically do not lend in New York or California. They will consider sponsors who have been turned down by bank financing and require experience and the ability to perform based on previous experience. They prefer to work with friendly and reliable people and ideally require a net worth equal to the loan amount and liquidity of about 10% of the loan amount, but can be flexible based on deal and market strength.
| Capital Type | Non-recourse construction loans for multifamily asset classes and select flagged hospitality transactions |
| Geography | Primary and secondary markets throughout the US, but typically do not lend in New York or California |
| Property Types | All types of multifamily related asset classes, including manufactured housing communities and build to rent. Will also consider select flagged hospitality transactions |
| Uses of Funds | Acquisition, hard and soft construction costs |
| Sponsorship | Will consider sponsors who have been turned down by bank financing, but require experience and ability to perform. May require third-party GC for sponsors moving up in the size of transactions |
| Recourse | Non-recourse for most deals |
| Check Size | $30M to $200M |
| Construction | Will fund ground up construction with entitlements in place |
| Mixed Use | Will consider mixed-use, as long as the proportion of commercial space qualifies for an agency debt take-out |
| Loan to Value | Up to 70% loan to cost, or loan to value on an as is basis, subject to 65% loan to value on an as complete basis |
| Sponsorship Equity | Will consider imputed equity, but prefer to see substantial “skin in the game” and alignment of interests |
| Interest Rate | 10% to 11.5%; SOFR plus 5.25% to 5.75% for multifamily, SOFR plus 6% to 6.5% for hospitality |
| Origination Fee | 1.3% is the typical origination fee |
| Payment Structure | Interest only payments |
| Duration | 3 to 4 years plus a one-year extension |
| Prepayment Structure | 36-month make-whole provision |
| Underwriting Requirements | Loans underwritten on projects with a 6%+ yield on cost will drive maximum leverage. Minimum DSCR of 1.1x based on stabilized net operating income |
| Deposits | Typical deposit is $100,000 to fund third-party reports and legal |
| Closing Time Frame | 60 to 90 days |
| Servicing | Construction loan draws are serviced with the best level of quality as a developer-friendly lender |
If this capital source may be of interest, book a call to discuss a potential capital arrangement.
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