micro cap private equity market rate multifamily housing development
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Micro Cap Private Equity Market Rate Multifamily Housing Development. G. Micro Cap Private Equity Market Rate Multifamily Housing Development. Reasons to Consider a Micro Cap Private Equity Provider Typical Deal Profile – Case Study Size of Equity Investment - PowerPoint PPT PresentationTRANSCRIPT
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Micro Cap Private Equity
Market Rate Multifamily Housing Development
I. Reasons to Consider a Micro Cap Private Equity Provider
II. Typical Deal Profile – Case Study
III. Size of Equity Investment
IV. Balancing Investor and Developer Returns
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Micro Cap Private Equity
Reasons to Consider a Micro Cap Private Equity Partner
I. Underwriting and other development expertise
II. Flexibility to leverage equity and debt sources to increase pipeline
III. Develop partnership with equity and debt partners for ease of execution and consistent underwriting standards
IV. More flexible fee requirements, reporting and other standards
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Micro Cap Private Equity
Typical Deal Profile
I. Geographically Flexible – Primary and Secondary Markets
II. Total Construction Cost - $20,000,000 - $40,000,000
III. Total Investor Equity - $4MM-$10MM
IV. Term Sheet Available Upon Request
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Micro Cap Private Equity
Size of Equity Investment
I. Total Equity Needs (Investor Equity <30% of total construction cost)
II. Level of Sponsor Participation (0%-4% of total construction cost)
III. Depending on Development Size – Participation with additional Equity Providers
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Micro Cap Private Equity
Balancing Investor and Developer Returns
I. Fees and “Profits” are more back loaded for Sponsors as compared to typical Tax Credit Developments
II. Preferred Return (12%) and IRR Hurdles (20%) to Investor prior to Profit Split
III. Balancing Investor Returns with fees for sponsor during deal
IV. Acquisitions Fees, Incentive Management Fees (or Asset Management Fees), other fees