Motel Real Estate Investment Syndicates - Tenants-In-Common Syndications

Investors seeking to participate in motel commercial real estate investment syndicates and motel developers seeking to sponsor motel real estate investment syndicates to provide equity financing for project development financing now have multiple venues to choose from.  Investors seeking to participate in the cash flow opportunities available through commercial real estate now have additional types of syndicates to participate in that cover a wide variety of industries:

• All hospitality property types.

• All senior housing property types.

• All retail property types.

• All commercial office property types.

• All healthcare property types.

• All multifamily housing property types.

• All warehouse/flexspace/manufacturing property types.

All projects are divided into one (1) of three (3) property classes:

• Pre-Construction Phase Syndicates.  Comparatively speaking, these syndicates are the most risky.  Project Sponsors that do not as yet have a bankable firm commitment for the required construction mortgage financing loan of the Project will be classified under this heading and the use of proceeds will be subject to certain expenses only.  Each Pre-Construction Phase Syndication sales plan is based upon a minimum sales target; an amount equal to the imputed equity gap (the total project budget less total other financing proceeds), or $2,500,000; whichever is greater.  All Pre-Construction Phase Syndicates must have a proposed holding period not to exceed three (3) years.  The expected gross return paid to the investors is a range of 150% to 300%.

• Construction Phase Syndicates.  Comparatively speaking, these syndicates are less risky than Pre-Construction Phase Syndicates, but generally more risky than Post-Construction Phase Syndicates (below).  Project Sponsors that do have a bankable firm commitment for the required construction mortgage financing loan are classified under this paragraph.  Each Construction Phase Syndication sales plan is based upon a minimum sales target; an amount equal to the imputed equity gap (the total project budget less total other financing proceeds), or $2,500,000; whichever is greater.  All Construction Phase Syndicates must have a proposed holding period not to exceed three (3) years.  The expected gross return paid to the investors is a range of 150% to 250%.

• Post-Construction Phase Syndicates.  Comparatively speaking, these syndicates are the least risky and therefore require extended holding periods in order to create gross returns that are competitive with those in the other categories (above).  Post-Construction Phase Syndicates are for properties requiring no materially significant construction operations as pending the closing of the Syndicate escrow.  These syndicates require a holding period of 7 to 10 years in order to generate a gross return to the investor in excess of 250%.

The minimum investment is always the same - $25,000.00.  This allows for widest possible ownership, while enforcing a set of transaction ground rules that increase the transparency of all transactions and creates a secondary level of much-needed capital market liquidity for commercial real estate development finance transactions across the entire spectrum of industries.  If you are a developer of hospitality properties, then you need to consider the financial investment leverage this specific type of syndication approach provides.