When it comes to finding the right financing for a commercial real estate project, a pitch that accurately encompasses the opportunity is priceless. That said, traditional offering memorandums are convoluted, static, and full of unnecessary information – so we changed them.
We had a few key ideas in mind as we did so:
1. Fund managers are stretched remarkably thin, and don’t have time to go through the DropBox maze of a pitch that they receive from most intermediaries. So we gathered feedback from lenders as to what they really care about, and then created OMs that are simple, yet comprehensive, in a quick-to-review and easy-to-follow design.
2. Sponsors want feedback on their project as soon as possible so that they can more accurately gauge projections and navigate any necessary shifts in capital stack or execution strategies. To combat timing delays between project pitch and terms issuance, we made our OMs web-based and responsive, and included text and video chat functionalities directly on the webpage. Now within minutes of sending out a project, we can talk to the funds, walk through the OM via screen control, and add comments or clarifications.
3. As sponsors move from one project to the next, they typically have to start over on their financing packages, resending countless documents that they’ve already provided. While simple at face value, this task can add days or weeks to the process. To help resolve this, we built out sponsor profiles that are created as we work with clients. This allows us to provide incremental updates to bios, financial statements, REOs, etc., without requiring any additional work from the client for each request. We also manage the information so that we can easily transition to our fractional model in which we assume more financing responsibilities.
4. When evaluating potential investments, a large portion of the underwriting process relies on the geographical area in which the project is located. To make it more convenient for lenders, we included interactive maps and location-specific metrics so that they can quickly get a grasp of the surrounding area.
The right financing doesn’t have to be so difficult to find, but the framework in which projects are presented has been bogging down the capital raise for far too long.
Get in touch with our team to discuss financing.
