How to Set Up a Private Equity Real Estate Fund 

By: Jan A. deRoos, Ph.D., Cornell University, and Shaun Bond, Ph.D., University of Cincinnati Spring 2018 Issue

How does one go about creating a partnership to raise equity for ongoing real estate investment?

Lenders' Environmental Due Diligence 

By: Tom Mounteer, Paul Hastings LLP Spring 2018 Issue

Lenders’ due diligence can be just as thorough as buyers’.

Finance Articles From Previous Issues

Real Estate Diversification via Structured Investments

By: Gabriel Pozo, principal, Advalurem Group Winter 2017/2018 Issue
Structured investments can enable real estate investors to move into a new market while limiting risks.

Evaluating Cap Rate Investment Strategies

By: Mark J. Eppli, Bell chair in real estate, Marquette University, and a NAIOP Distinguished Fellow Fall 2017 Issue
Which cap rate investment strategy generates the best return?

Negotiating Loan Guarantees and Cost Overruns in Development Joint Venture Agreements

By: Eric D. Lemont, real estate partner in the Boston office of Sullivan & Worcester LLP Fall 2017 Issue
Real estate development joint ventures often require lengthy and complex negotiations regarding construction loan guarantees and cost overruns.

Private Equity Finance and Securities Compliance for Real Estate Developers

By: Suzanne Mulvihill, managing partner, Haight Brown & Bonesteel’s Sacramento office, and leader of the firm’s transactional practice group Fall 2017 Issue
Developers and property owners must understand the risks involved in recruiting passive investors.

Innovative Financing For Roads and Highways

By: Robert T. Dunphy, a transportation consultant and emeritus fellow, Transportation Research Board Summer 2017 Issue
New approaches are needed to fix an old problem.

A More Relevant Measure of Risk

By: Mark J. Eppli, Bell chair in real estate, Marquette University, and a NAIOP Distinguished Fellow Summer 2017 Issue
Is the cap rate to U.S. Treasury comparison an “apples-to-oranges” assessment?

How to Attract Institutional Capital

By: Kelvin Tetz, partner, and Greg Martin, partner and national real estate practice leader, Moss Adams LLP Summer 2017 Issue
Local and regional developers who want to build relationships with institutional investors will need to implement these reporting and operating guidelines.

Why Investors Are Flocking to Student Housing

By: Paula Poskon, founder, STOV Advisory Services Spring 2017 Issue
Purpose-built student housing has matured into an institutionally acceptable asset class.

Maximizing Revenue Through Dynamic Parking Pricing

By: Tim Flanagan, managing director, Sentry Spring 2017 Issue
Sensors, software and apps make dynamic pricing feasible — and profitable.

The Property Life Cycle: Planning for Effective Cost Segregation Strategies

By: Edward D. Meyette, CPA, partner, Crowe Horwath LLP Spring 2017 Issue
New regulations create more cost segregation complexities and opportunities, making tax planning more complicated.

Industrial Real Estate Fundamentals and Investment Outperformance

By: Chris Caton, senior vice president and global head of research, and Melinda McLaughlin, director of research, Prologis Winter 2016/2017 Issue
Why is industrial real estate so attractive to the capital markets, and why is it outperforming other types of real estate investments?

Big Changes Yet to Come from Basel III and Dodd-Frank

By: Jordan Angel, director with HFF in San Francisco Winter 2016/2017 Issue
New regulations are constraining construction lending and testing the long-term viability of the CMBS market.

What does a shift in U.S. manufacturing and import/export trends mean for industrial

By: Walter Kemmsies, Ph.D., managing director, economist and chief strategist, U.S. Ports, Airports and Global Logistics Group, JLL Fall 2016
What does a shift in U.S. manufacturing and import/export trends mean for industrial real estate, particularly near major ports?

Real Estate Comes Into Its Own

By: Paula Poskon, founder, STOV Advisory Services Fall 2016
How REIT investors, both institutions and generalists, are — and are not — reacting to real estate becoming a new GICS sector.

CRE Lending Environment Tightening

By: Amanda Tran, a freelance real estate writer and researcher Summer 2016
The commercial real estate lending market is in a period of adjustment, as lenders adapt to a shifting economic and regulatory landscape.

Cost Segregation Is Just the Beginning

By: Bruce Johnson, cofounder and partner, Capstan Tax Strategies Summer 2016
New regulations further expand the utility of engineering-based tax strategies.

Cross-border Investment in US Commercial Real Estate

By: Jim Costello, senior vice president, Real Capital Analytics Spring 2016
Foreign investment in U.S. CRE both soared and shifted in 2015.

IRS Cracking Down on Fee Waivers in Real Estate Transactions

By: Bruce J. Belman, JD, CPA, a partner with Crowe Horwath LLP and the firm’s tax services leader on partnership taxation, and Steven R. Driver, Jr., CPA, MT, a member of the firm’s construction and real estate services group Spring 2016
Partnership payment agreements must focus on entrepreneurial risk to comply with proposed IRS regulations.

Retail Streetscape Redevelopment

By: Sam Black, contributing editor, Development; attorney; and past chairman of the Washington, D.C., Smart Growth Alliance Spring 2016
Real estate and business leaders can work with the public sector to plan and fund streetscape improvements that benefit all stakeholders.

Seniors Housing Investment Opportunities

By: Beth Burnham Mace, chief economist, National Investment Center for Seniors Housing and Care Winter 2015/2016
Pricing in the seniors housing and care sector is setting records.

Going Public: The Ins and Outs for REITs

By: John McCarthy, CPA, director, Assurance Services, Needham, Massachusetts, Marcum LLP Winter 2015/2016
Taking a REIT public involves numerous risks as well as rewards.

Assessing the True Value of Deep Energy Retrofits

By: Michael Bendewald, a manager at Rocky Mountain Institute, and Douglas Miller, a senior associate at RMI. Winter 2015/2016
Strong market evidence demonstrates that energy cost savings — while significant — represent just one driver motivating investment in deep energy retrofits.

Five Tips for Selecting the Right EB-5 Financing Partner

By: Robert A. Richardson, chief operating officer of EB-5 New York State, a regional center located in Buffalo, New York, and a board member of NAIOP Upstate New York Winter 2015/2016
A simple checklist can help developers evaluate prospective regional center partners.

Canadian Pension Funds and CRE

By: Ross Moore, director of research, Canada, CBRE, and Roelof Van Dijk, research manager, Canada, CBRE, with contributions from Jeannette Rice, CBRE’s Americas head of investment research Fall 2015
Limited opportunities in Canada are pushing capital to the U.S., Europe and elsewhere.

Canadian Institutional Investment in the US

By: Pierre Bergevin, managing partner, Brookfield Financial Fall 2015
Canadian capital is the single largest source of inbound capital into the U.S. commercial real estate market.

Investors Look to Development for Higher Yields

By: Lydia Tan and Martin Standiford, senior vice presidents for development in the Western and Eastern U.S., respectively, at Bentall Kennedy (U.S.) Fall 2015
Today’s positive economic outlook and capital-rich environment are leading investors to explore new development opportunities.

Beyond Specific Performance: Recovering Damages Through Escrow

By: Michael Newhouse, a shareholder in the Litigation Practice Group at Buchalter Nemer and a licensed real estate broker. Summer 2015
A developer who achieves a forced sale through a special performance lawsuit can recover damages as escrow credits.

Crowdfunding for Accredited and Non-accredited Investors

By: Mark Roderick, attorney, Flaster/Greenberg PC Summer 2015
What’s the difference, and why does it matter?

The Benefits of Cost Segregation Studies

By: Robin Word, CPA, real estate niche leader, Averett Warmus Durkee CPAs, Orlando, Florida Summer 2015
Cost segregation studies can help real estate investors maximize after-tax cash flows.

2015 Guide to Capital Connections

By: None Summer 2015
Looking for Capital? Capital Connections - the NAIOP guide to financing lists firms around the country.

Reaching Out to Minority Investors

By: Dan Ruh, senior vice president, real estate development, Al. Neyer Spring 2015
A Cincinnati-based developer enables a diverse group of community residents to invest in and benefit from a commercial real estate project.

The Urban/Suburban Office Cap Rate Spread

By: Brian Moosburner, CFA, investment officer, Metzler Real Estate Spring 2015
How technology companies and the changing role of technology are affecting the cap rate spread between urban and suburban office properties.

Financing Transit-oriented Mixed-use Development

By: Sam Black, attorney and past chairman of the Washington, D.C., Smart Growth Alliance Spring 2015
Developers now have a range of options from which to choose when financing projects at or near transit stops.

Private Equity Bountiful for CRE

By: Ellen Rand, freelance writer and former contributing editor, Development Winter 2014
With an abundance of dry powder to deploy, confidence in improving real estate fundamentals and a wider net being cast in search of investment opportunities, private equity real estate fund managers may be closing in on a banner year and looking ahead to a more active 2015.

EB 5 Development and Target Employment Areas

By: Eric McAllister, partner, Miller, Morton, Caillat & Nevis LLP in San Jose, Calif. Associate Jordan Ryan contributed to this article when he was with Miller, Morton, Caillat & Nevis LLP. Winter 2014
Developers have established target employment zones in downtown Manhattan and other major real estate markets, responding to the interest of EB-5 investors looking for safe markets in which to invest.

Financing Unstabilized and Distressed CRE

By: Jerry Dunn, president and CEO, A10 Capital Winter 2014
Contrarian thinking during the economic downturn has resulted in a new, thriving company.

REITs Expand Beyond Real Estate

By: Michael Reyen, associate; Sujata Yalamanchili, partner; and Nicholas Pusateri, law clerk, Hodgson Russ LLP Winter 2014
Two recent decisions by the Internal Revenue Service and new regulations proposed by the IRS and the U.S. Treasury Department are generating much buzz within the real estate industry.

Crowdfunding Scales Up

By: Ellen Rand, freelance writer and former contributing editor, Development Fall 2014
This being baseball season, a baseball metaphor seems apt to describe the stunning year-long rise of real estate crowdfunding: dramatic growth aside, we are still in the bottom half of the first inning. Crowdfunding is much like old-style syndication, but with the turbo engine of the Internet behind it.

The Impact of Interest Rates on Cap Rates

By: Ellen Rand, freelance writer and former contributing editor, Development Fall 2014
What’s the outlook for the economy and for interest rates for the rest of the year? Steady as she goes, as long as the Federal Reserve makes no sudden drastic changes to its monetary policy. Rates are likely to rise moderately over the next 18 months to two years, with steadily improving employment and a gradual pickup in inflation. That’s how JLL sees it, as the company recounted earlier this year in its “Interest Rate and Cap Rate Perspective” report.

The Senior Housing Boom

By: Thomas Grape, chairman and CEO of Benchmark Senior Living. The material in this column is drawn from a program held by NAIOP Massachusetts in Boston that was moderated by Ryan Maconachy, managing director, HFF. Other speakers included Chris Kazantis, director of AEW Capital Management; Ted Tye, managing partner, National Development; and Alfred Wojciechowski, principal, CBT Architects. Fall 2014
Senior housing has been a hot topic and a strong commercial real estate investment class for several years. According to Real Capital Analytics, senior housing and care facilities year-over-year sales volume increased by 30 percent in the second quarter of 2014. This asset class encompasses various niches; it is no longer just your grandparents’ nursing home or your parents’ 55+ community.

Foreign Investment in U.S. Real Estate: “The Spigot Is On”

By: Ellen Rand, freelance writer and former contributing editor, Development Summer 2014
“They’ve all come to look for America,” sang Simon and Garfunkel back in the 1960s, and their lyrics continue to ring true. They — the Canadian, Chinese, Australian, European, Korean, Singaporean and Middle Eastern real estate investors — have been coming to America in ever-increasing numbers for the past couple of years. In an uncertain world, the U.S. commercial real estate market is the most sought-after on the planet because it is large, liquid and perceived as a safe haven for the long term.

2014 Guide to Capital Connections

By: None Summer 2014
Looking for Capital? Capital Connections - the NAIOP guide to financing lists dozens of firms around the country.

Interest Rate Impacts on Commercial Real Estate

By: Jose Cruz, senior managing director, HFF Spring 2014
The capital markets environment over the past 18 months has been exceptional, given the abundance and low cost of capital. Capital has been reallocated from financial to hard assets, with commercial real estate receiving an increased percentage of investment resulting from foreign investors purchasing U.S. commercial real estate.

Nuts and Bolts of Real Estate Joint Venture Partnerships

By: Jonathan B. Farrell, CPA, a partner in the real estate group of DiCicco, Gulman & Co. LLP Spring 2014
With real estate markets across the country flexing their recovery muscles — and, in some cases, clearly booming — new cash is available for developers seeking joint venture (JV) partners to help finance their projects. But while this cash can make it easier to launch projects and attract high-quality tenants, developers need to pay close attention to the details of the partnership.

Investing in Secondary Markets: Timing Is Everything

By: Ellen Rand and Ron Derven, contributing editors, Development Winter 2013
With so much public and private capital chasing commercial real estate investment opportunities in the primary markets, is this the right time to focus attention on the secondary markets? Yes, according to Sam Chandan, Ph.D., president and chief economist of Chandan Economics.

Is Credit Loose or Tight?

By: Ellen Rand and Ron Derven, contributing editors, Development Winter 2013
Panelists at a Development ‘13 session on capital markets agreed that as of fall 2013, credit is neither too loose nor too tight; it is just right.

Real Estate Investors Face New Investment Income Tax

By: Robin Word, CPA, tax manager, Real Estate Practice Group, Averett Warmus Durkee Winter 2013
Just as the real estate industry is beginning to experience a long-awaited recovery, a new investment income tax is poised to lighten the wallets of many real estate investors.

Financing Large-Scale MXDs

By: Ellen Rand and Ron Derven, contributing editors, Development Winter 2013
Financing mixed-use developments (MXDs) that may span many city blocks and take decades to develop is significantly more complex than financing single-use projects. In a session titled “Mixed-Use Case Studies: The Price of Success” at Development ‘13, three developers described their large-scale mixed-use projects and Kevin Jennings, Bank of America Merrill Lynch reacted to each project, offering comments about how lenders approach financing these and similar types of projects, and describing some of the unique financing vehicles employed.

Crowdfunding: A Game-Changer in Finance?

By: Ellen Rand, contributing editor, Development. Fall 2013
Ask Benjamin Miller, co-founder of the Washington, D.C.-based online real estate finance company Fundrise about crowdfunding and he will tell you, as he told the House Committee on Small Business several months ago, that “the Internet will do to capital what it did to media and commerce: it will completely disrupt the status quo.” In short, it will be transformative.

Tax Abatements as a Shield for Looming Property Tax Increases

By: Jaclyn S. Maloney, attorney, Husch Blackwell LLP. Fall 2013
Throughout the Great Recession and well into what has become an extended period of slow recovery, the tax revenue base for municipal governments has been shrinking. According to a 2012 National League of Cities year-end survey, “National League of Cities Research Brief on America’s Cities,” 2012 was expected to be the sixth consecutive year of year-over-year declining municipal revenues. Municipal revenues are not expected to rebound in real time with the economy.

Will Values Fall If Rates Rise and Rents Don’t?

By: Ellen Rand, contributing editor, Development. Fall 2013
This past spring, Joseph L. Pagliari Jr., clinical professor of real estate at the University of Chicago’s Booth School of Business, gave a presentation titled “Some Thoughts on Past and Future Real Estate Returns.” Today, as interest rates appear to be rising, nervousness about rate increases and their impact on real estate values appears to be on the rise as well. Development caught up with Pagliari to ask about his outlook on interest rates, commercial real estate values, and what all this means for owners and investors.

2013 Guide to Capital Connections

By: None Summer 2013
Looking for Capital? Capital Connections - the NAIOP guide to financing lists dozens of firms around the country.

Foreign Investment in U.S. Real Estate: Gateway Markets Still on Top

By: Ellen Rand, contributing editor, Development Summer 2013
To foreign investors, commercial real estate in the U.S. looks like “the cleanest shirt in the dirty clothes pile,” as one such investor told Jim Fetgatter, chief executive of the Association of Foreign Investors in Real Estate at a recent investment conference. That should not have come as a surprise, considering that AFIRE’s annual survey among its 200 members showed that four of the five cities selected as the top global cities for investment dollars are in the U.S.

Getting Loans Where Everybody Knows Your Name

By: Ellen Rand, contributing editor, Development. Spring 2013
Defined by the Federal Reserve Board as institutions with $10 billion or less in total assets, community banks can be a potent source of financing because of their local roots and knowledge, flexibility and commitment to their communities.

Reducing Development Agreement Risks in Municipal Bankruptcies

By: B. Scott Douglass, Dean Gloster, attorneys and partners at Farella Braun + Martel, and Gary Kaplan, attorney and special counsel at Farella Braun + Martel. Spring 2013
As part of a bankruptcy, a city can assume or reject “executory contracts” — contracts under which material performance obligations remain such that a breach by a party would entitle the other party to terminate. However, if an executory contract is rejected by a city, the developer has no ability to enforce its terms and conditions.

The Entrepreneur: Lessons in Discipline from Canada's Real Estate CEOs

By: Ron Derven, contributing editor, Development. Spring 2013
Could much of the pain experienced in the aftermath of the worst global financial crisis since the Great Depression in the United States have been avoided by following the tenets of Canada’s foremost real estate professionals?

Abundance of Capital Continues to Reward Stabilized Properties, Gateway Markets

By: Ellen Rand, contributing editor, Development Winter 2012
This article discusses ICSC/NAIOP Real Estate Capital MarketPlace Conference highlights from the debt and structured finance panels and a discussion of real estate capital flows and how they are being deployed.

Competition for Quality Assets Spurs Creative Investment Strategies

By: Ellen Rand, contributing editor, Development Winter 2012
Because the low-interest-rate, low-inflation environment is expected to continue for the foreseeable future, the challenge for investors and lenders of all types is to find investments that offer something more than single-digit yields.

Appetite for Debt Increases, But Conservative Underwriting Remains

By: Ellen Rand, contributing editor, Development Fall 2012
Even if the volume of new commercial mortgage lending originations dips in the second half of the year, the first half of 2012 has been robust. According to the latest figures available from the Mortgage Bankers Association, the level of commercial and multi-family mortgage debt outstanding increased by $8.1 billion, or 0.3 percent, between 1Q12 and 4Q11.

2012 Guide to Capital Connections

By: None Summer 2012
Looking for Capital? Capital Connections - the NAIOP guide to financing lists dozens of firms around the country.

Finding a Two-Loan Solution for Refinancing and New Construction

By: Ellen Rand, contributing editor, Development Summer 2012
At the risk of inducing mortgage envy, here is a story of how financing – even construction financing for a speculative building – can go very, very right. Of course, it helps to have a Class A property in a top tier market. Even so, challenges had to be overcome at a time of flux and uncertainty in the capital markets.

Strategically Green - New Financing Vehicles Target Energy Efficiency Retrofits

By: Abigail C. Johnson, president, Abacus Property Solutions, LLC Summer 2012
Only a very small portion of existing buildings – particularly older inventory – has undergone energy efficiency retrofits. So what’s the holdup? The short answer is money — or lack of money — to allocate to energy efficiency projects. Energy-related retrofits play second when competing with necessary capital budget items and/or when the ROI of the energy project is below the internal cost of capital.

Mixed Forecast for Refinancing Loans Maturing This Year

By: Ellen Rand, contributing editor, Development. Spring 2012
According to research firm Trepp, some $360 billion in commercial real estate loans are maturing this year and more than 60 percent are underwater. Of that total, $53.4 billion in CMBS loans are coming due this year, $15.5 billion of which were vintage 2007 loans, 27 percent of which are in special servicing and 18.5 percent are 30 days or more delinquent.

Of REITs: Public and Non-traded

By: Ellen Rand, contributing editor, Development Winter 2011
This has been a bumpy year for publicly-traded REITs, as Philip Hawkins, president and CEO of DCT Industrial Trust, told Development ‘11 attendees at a CEO Insight session. Despite the uncertain environment, DCT has been an active buyer, moving carefully up the risk spectrum as well as selling assets that are less strategic for the company.

Online Equity Exchange Makes Its Debut

By: Ellen Rand, contributing editor, Development Fall 2011
Imagine a combination of an online dating service, stock exchange and social network, just for commercial real estate. David Libman has imagined it, and as founder and CEO, calls it Globerex, a new online global commercial real estate equity exchange. Its purpose is to enable equity investors to find prospective investments and for commercial real estate sponsors to find equity.

A Tale of Two Markets: Present vs. Past CMBS

By: Ellen Rand, contributing editor, Development Summer 2011
The CMBS market may not have ramped up to 2007 levels, but the contrast between this year and last year is stark: according to Standard & Poor’s, the first quarter saw nearly as much in new CMBS volume as it did in all of 2010.

At a Crossroads: Loan Sales, Modifications Growing as Markets Stabilize

By: Ellen Rand, contributing editor, Development Spring 2011
The long road to clarity and price discovery may seem a little shorter than it was in the darker days of the recession, as momentum in loan sales and modifications is building. This activity also proves the old adage that one person’s distress is another’s opportunity.

First Look - Show Me the Money

By: Elizabeth Sherrod, managing editor and research director, NAIOP Winter 2010
With traditional sources of capital constrained or unavailable, a government program called EB-5 is attracting interest from commercial real estate developers. Many have chosen to form regional centers to attract foreign investors willing to invest $500,000 for the opportunity to obtain temporary, then permanent visas.

The Advantages of BTS Financing

By: Ellen Rand, contributing editor, Development Winter 2010
Why is build-to-suit financing relevant now? The answer is pretty basic. “The days of speculative building are done,” she said. “There’s less demand and financing is gone.”

Avoiding Hard Money Loan Scams

By: Ellen Rand, contributing editor, Development Fall 2010
Industry experts weigh in on avoiding hard money loan scams and steps you can take to discern credible lenders from crooks.

Strategically Green - Balancing Green With Financial Results

By: Scott Lenger, director of strategic relationships, Trane Fall 2010
Building owners and tenants are reminded of the high cost of energy every time they open their monthly utility bills. Energy costs are the largest operating expense for most commercial properties, accounting for 25-30 percent of a typical building’s annual operating budget.

CMBS Loans: Rising from the Ashes

By: Ellen Rand, contributing editor, Development Summer 2010
Even as delinquency rates continue to rise on existing CMBS loans, a new wave of commercial mortgage backed securities has begun to bring a taste of liquidity back to a parched market. But before you say, “Oh no, here we go again,” consider this: loan originators are focused on well-leased, well-located properties with seasoned sponsorship, and loan terms are stringent.

Reinventing Finance

By: Ellen Rand, contributing editor, Development Summer 2010
While 2010 may not turn out to be a banner year for capital flows to commercial real estate, investors of all stripes do have a growing hunger for yield, which has led to an increasing willingness to wade back into the market. Still missing from the overall picture, though: a much-anticipated boom of dispositions/acquisitions of problem loans and distressed properties.

How Financing Looks Now

By: Ellen Rand, contributing editor, Development Spring 2010
If there’s a good deal, there’s no liquidity problem. If you own real estate that’s overleveraged, there’s no financing. If you have a well-leased property but it’s underwater, “you’re probably screwed.”

Strategically Green: Navigating Sustainability Financing

By: Lee J. Peterson, Esq., Reznick Group P.C. Spring 2010
In today’s real estate environment, sustainable building means different things to different people. It runs the gamut from using low toxicity building materials and low (or no) emission FF&E, all the way to buildings which are “net zero” and have the property’s energy need supplied with renewable and energy efficiency technologies.

The REIT Race to Liquidity

By: Ellen Rand, contributing editor, Development Spring 2010
Heartened by the market’s enthusiasm (as evidenced by the $30 billion in new equity raised for existing REITs last year), nearly a dozen commercial real estate companies had filed about $4 billion worth of offerings with the SEC by year-end 2009, with many more expected to file or in the process of organizing themselves to go public this year.

What to Do, Now that the 'Reset' Button Has Been Hit?

By: Ellen Rand, contributing editor, Development Spring 2010
To Jim Costello real estate is “always a good investment; it’s a matter of how you get into it.” He made that assertion during a podcast based on the CBRE-EA paper, “The Upside of the Downturn: Opportunities in Commercial Property Investments.”
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