HOW NET LEASE DEVELOPERS BENEFIT BY PARTNERING WITH PSF
Completing a project on time and on budget is essential to net lease developers and tenants. Uncertainty in either of these areas is what causes developers to lose sleep.
If you drill down into the causes of development delays and developer anxiety, one of the primary culprits is financing. The time and effort it take for developers to raise equity and then go through a traditional bank's underwriting process can push project timelines that impact their ability to complete the project on time and ultimately allow the tenant to open for business and start generating sales.
PSF borrowers have consistency and transparency in our underwriting going into the closing of the loan and supreme comfort in the fact we have long-term committed capital, which means confidence to tie up more sites and, ultimately, get more leases signed.
TRADITIONAL FINANCING FOR NET LEASE DEVELOPMENTS
Most net lease development capitalization occurs through traditional banks and pass-the-hat equity raises. With so much at stake, developers can be reluctant to alter their approach if they have long-standing banking relationships and an existing investor network.
Historically, banks are rigid in their terms - which doesn't always align with the complex reality on the ground (i.e., building permits, lease agreements, entitlements, etc.) - or the bank's attachment point is so low that they aren't fully focused on the success of the project.
Meanwhile, investor documentation, reporting, and communication demand time, effort, and dollars away from the projects themselves. Traditional capitalization of net lease development deals creates a lot of cooks in the kitchen.
We launched Paramount Specialty Finance (PSF) to solve the inefficiencies in this market and give NNN developers credit for putting together great deals by offering complete and programmatic capital stack solutions for their projects. Through a true long-term partnership mentality and up to 100% Loan to Cost financing, developers can expedite the closings, execute more leases, and pursue new client relationships. This isn't our opinion; we frequently hear this feedback from our clients and partners.
FOCUSED TIME FOR NET LEASE DEVELOPERS
When developers get pulled in too many directions, workflow gaps inevitably occur, and radio silence, quality oversight, and compounding stress and anxiety happen. In short, everyone loses.
The most common outcome of this lack of focus is missed deadlines and project delays, which are frequently to blame for budget overruns.
We aim to provide developers relief by introducing them to our Chief Operating Officer, Orlagh Sinisgalli, whose industry record exceeds 200 build-to-suit loans closed and whose in-house closing team philosophy is to streamline the financing process and get the development project across the finish line in the most efficient way possible. By saving developers from headaches and wasting time, they can focus on what they love and excel in.
Our goal is never to look for ways to kill projects but rather to find solutions to finance new deals quickly and reliably.
FINANCING WITH CLEAR DATA FOR NET LEASE DEVELOPERS
Saving time and money for net lease developers has helped us close more than $850 million in transactions across ~200 net lease loans with zero foreclosures since 2015. Beyond that, we provide developers with an open book cost of capital analysis on every deal.
The data in this model explains our terms and how we price. We compare it to a traditional capital stack based on developers' assumptions.
With this information, developers can clearly decide how they want to proceed. The fact that 65% of our borrowers were repeated borrowers in 2020 tells us that our program and platform have fundamentally changed the sector. We are continuously engaging and funding new net lease developer relationships nationwide.
If you're curious to learn more about our approach, don't hesitate to contact Matt Valdez, our head of business development, at valdez@paramountfin.com or call him at (512) 656-5179.