Commercial Investment Real Estate May/June 2016 | Page 17

can likely avoid a forced “marriage” of capi- tal. Developers should see their capital pro- vider as a long-term partner instead of as a quick capital source for one–of deals. Keeping this in mind, developers should watch out for capital sources that lack bal- ance sheets. Typically, these frms are wait- ing to win the developer’s business and then go out and fnd the capital, leaving the devel- oper without the certainty of execution that they expected. Tese frms can also risk the developer’s reputation. When searching for a capital provider, developers should look for partners that have a strong track record of success and experience in complex fnancial transac- tions. Tey should ask to see the potential partner’s portfolio and discuss the most recent deals the frm has closed. Increasing Opportunities By partnering with an experienced capital provider, developers can focus on managing the cost and execution side of new projects and allow the capital provider to use its expertise in pricing. Tis transfers the risk of future cap rate changes to the capital pro- vider. Whether this transfer of risk is struc- tured as a forward-takeout or full funding from closing, the capital markets burden is removed from the developer. Capital sources spend 100 percent of their time focused on the economic drivers of real estate pricing. Developers can leverage this expertise by bifurcating the development pro- cess and allowing the capital source to focus on its strengths while the developer focuses on the actual real estate. Tis approach allows for the most competitive all-in proposal. One of the greatest benefts of selecting the right capital partner is the ability to pursue more potential opportunities. Leveraging the fnancial strength of a capital partner allows the developer to increase deal fow. By not having equity or debt capacity constraints, the developer is able to pursue more deals that generate fee income without putting capital at risk. A strong capital partner will also provide any lender-required fnancial guarantees, which protects developers from taking on this additional liability as well. Along with an increase in deal fow, expe- rienced capital providers can expand devel- opers’ networks by making introductions to top frms in the industry. Tese connections can include general contractors, property managers, and other resources. Today developers who are still relying on their own internal capital and potentially stale market knowledge are at a disadvantage to competitors who are forming alliances with capital sources. However, developers who are looking to take advantage of strategic capital partnerships need to take the time to fnd the right capital source for their specifc projects. Zack Markwell is co-founder of Stonemont Financial Group. Contact him at zack.mark- [email protected]. The CCIM Institute’s 2015 President’s Cup winners TIER 1 1st Place – Georgia CCIM Chapter 2nd Place – North Carolina CCIM Chapter 3rd Place – Houston/Gulf Coast CCIM Chapter TIER 2 1st Place – Central Texas CCIM Chapter 2nd Place – Middle Tennessee CCIM Chapter 3rd Place – Iowa CCIM Chapter TIER 3 1st Place – Southern Nevada CCIM Chapter 2nd Place – Utah CCIM Chapter 3rd Place – Memphis Metro CCIM Chapter CCIM.com Congratulations to the nine local CCIM Chapters that earned the President’s Cup Award in a competition conducted by the CCIM Institute. The President’s Cup Awards program honors the CCIM Chapters that have demonstrated the highest degree of skill, ingenuity, and innovation in promoting the membership benefits of the Institute at the local and regional levels. The following chapters earned the 2015 President’s Cup Award. The three tiers are based on the number of Chapter members, with the chapters with the highest number of members in Tier 1. The awards were presented on April 5 at the Institute’s Annual Midyear Business Meetings held in Chicago. May | June | 2016 