By Duke Dennis
When you need to design a building, you hire an architect for your design. When you need legal representation, you hire a lawyer to argue your case. When you NEED capital for a real estate project, you hire Metropolitan Capital Advisors (MCA). If you do not hire an exclusive commercial real estate finance intermediary to represent you and make a case for your project to capital sources, you are doing yourself and your project a disservice. If you’re still not convinced, here’s why.
Time & Focus:
As a buyer or developer of commercial real estate, you are extremely busy. Days and nights are filled with your primary responsibilities of underwriting new acquisitions, developments, meeting with prospects and existing tenants, with the city for zoning and plan approvals, with architects and engineers, neighborhood associations, the list of responsibilities goes on and on. Then, after you’ve done all this hard work to put a project together, and you are under the gun of a sales contract deadlines, the last and most important key to the whole deal is finding capital to commit to your project. Given all these other responsibilities, the best thing you can do is leverage your time by hiring an expert whose sole focus is arranging the capital/financing for your transaction.
Finding a capital partner, for debt or equity, is a lot of work. Do you have the extra time it will take to package a finance request, meet and follow-up with capital sources, field phone calls & emails from capital sources, take site tours, negotiate term sheets & loan documents and more while managing your prior responsibilities? We allow you to leverage your resources and focus on what you do best.
How deep is your network of capital providers and how current is your knowledge base? It is our job to know all of the available capital providers in the market and what they have been up to. We attend capital conferences and regularly meet with new & established capital providers to stay up-to-date on their current terms and lending/investment parameters. Additionally, every week capital providers seek out our firm to meet so they can make us aware of the latest changes to their lending programs and capital.
With all of these options, we cast the widest net possible to make sure our clients see the full spectrum of terms available for the capital they are seeking. Whether it is high leverage, low-interest rate or recourse driving your decision we will market to as many lenders as we have to in order to find the right fit. In the past, we have had placement assignments where we went out to over 100 sources of capital to find the one that fit our client’s needs. Going back to the earlier point: do you have the time or resources to stay abreast of the changing market dynamics with respect to the available capital?
Exclusive & Focused Representation:
One of the most common rebuttals to our service from a prospective client is they do not want to sign an “exclusive.” In other words, they want to play the field with multiple mortgage/equity brokers in hopes that one of them finds a source to do their deal. Here’s the dirty little secret: if a capital source sees the same deal coming from two different capital brokers, it gets “BOPed,” meaning it goes to the Bottom Of the Pile (BOPed) of deals the capital source is evaluating. When this happens, the Client has just lost the attention and momentum with that capital source and has effectively shot themselves in the foot. Instead of getting two to three times the attention they think they’re getting by working with multiple non-exclusive brokers, they get no attention from the capital source at all. This is because capital sources do not want to waste time speaking with someone does not have “exclusive-control” or hold exclusive representation of the deal.
Experience & Certainty of Execution:
Metropolitan Capital Advisors is over 25-years old as a firm and has placed in excess of $14 Billion, Billion with a B, in capital on behalf of its Clients. Each year on average we arrange capital for 60 to 80 transactions. This volume allows us to constantly be in the capital markets. With the constant stream of deals, we can give Clients relevant and real-time feedback as to what options are available to them. Additionally, we have worked with capital providers on multiple occasions, and all are not created equally. Some are fast, some are slow, some will negotiate and others won’t. Why don’t you use MCA for our experience with these capital sources? That way you can steer clear of situations where you have to close with a capital source who may not be the best fit, merely due to time constraints and lack of experience.
In conclusion, imagine a standard purchase and sale contract that allows 60 – 90 days to close on your property and this is all the time you have as the buyer/developer to prepare for finding your capital partner. Trying to squeeze all the due diligence and marketing it takes to find the right capital source into that short period of time is the equivalent of cramming the night before an exam. We all know how that turns out…is that the same type of approach you want to take with your multi-million dollar commercial real estate project? I think not.
The author, Duke Dennis, is a Senior Director with Metropolitan Capital Advisors. To learn more about how Metropolitan Capital Advisors can help you, Duke can be reached at [email protected] (720) 527-8173.
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