Micro Cap Private Equity

Market Rate Multifamily Housing Development

G

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

G

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

G

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

G

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

G

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