Partner with the Professionals

What we do?

Circulus is a crowdfunding platform that enables investors to partner with the leading commercial real estate developers and sponsors of multifamily, retail, self-storage, hotel, industrial and office properties.

Why real estate

How it works?

We provide preferred equity (mezzanine financing) to developers and sponsors to complete projects and acquisitions. Our investors purchase units in individual and pooled assets via the Circulus crowdfunding platform.

How it works?

Our team underwrites every transaction to ensure they are sound investments. Only those that pass the rigorous underwriting guidelines are offered to investors.

How it works?

Approved investors can buy participation units for as little as $5000 per transaction. Each project has it’s own private placement memorandum and participation agreement or limited partnership agreement.

What is mezzanine financing?

Mezzanine financing is the preferred equity or the loan between the sponsor’s equity and the senior lenders’ loans in the capital stack.

$1 million - mezzanine financing

$7 million senior lender first mortgage

$2 million- equity Borrower’s Investment

$10 Million Property Acquisition

Capital Stack

Why sponsors need mez?

Senior lenders, banks and insurance companies, seek to limit risk. Their costs of funds are extremely low so they don’t have to take yield or credit risk. When a lender’s cost of funds is 1%, it can lend at 4-6% interest and limit the amount it lends to 60-75% of a property’s value (LTV).

Why sponsors need mez?

Senior lenders lower their risk by lowering LTVs. Lower LTVs mean there is less money available to borrow. This means sponsors have to put more equity (their own cash) into deals or…... find a partner.

Why sponsors need mez?

Mezzanine financing or preferred equity fills the gap between what the bank lends and the sponsor’s equity. In return, mezzanine lenders receive a much higher yield than the senior lender and a claim on the sponsor’s equity.

Mezzanine terms and returns

Mezzanine loans are not “cookie cutter.”

They can be structured to help the sponsor achieve his/her goals and by doing so the mezzanine lender is able to increase its yield.

Mezzanine terms and returns

Terms ● 2-7 years

Returns● 10-18% annual yields + (participation)

Mezzanine Structure

Many mezzanine loans are interest only with monthly or quarterly payments. The mezzanine lender may or may not record a lien on the property title. In many cases, a UCC filing is recorded as a claim against the sponsor’s equity.

Mezzanine Structure

Why a UCC filing and not a property lien?In case of sponsor default the mezzanine lender can quickly cure the default and foreclose on the sponsor’s equity to gain control of the property. = Much faster process than judicial foreclosure from 2nd lien.

Why be a mez lender?

Mezzanine financing provides participants with the best risk adjusted returns in the capital stack. ● Senior lenders get 4-6% interest● Sponsor receives 12-20% leveraged returns

with the most risk and work● Mez lenders receive 10-18% unleveraged

returns with claims on the sponsor’s equity

Why be a mez lender?

“Piggy-back the good deals”The best real estate developers and sponsors use mezzanine financing to limit their equity requirements. Mezzanine lenders get to participate in profitable, high profile developments and acquisitions.

Why be a mez lender?

“Piggy-back the good deals”The sponsor does the heavy lifting of finding properties, having properties rezoned, securing permits, hiring contractors, managing properties & negotiating with tenants…...The mez lender provides capital and receives a similar ROI as the sponsor.

What Circulus does?

● We find the best sponsors and developers as partners.

● We underwrite each transaction to ensure financial soundness.

● We prepare the private placement and partnership agreements.

● We present our investors with the best deals.

What Circulus does?

● We service the mezzanine loans and process payments for investors.

● We monitor developments and properties to ensure our investors’ interests are being served.

How to participate?

● Go to http://mycirculus.com● Register● Complete accredited investor questionnaire● Check site and emails frequently for

available deals

Contact:

Matt LutzManaging Partner

Circulus (http://mycirculus.com) mlutz@tarponbaycapital.com

412-841-5009