Real Estate Syndicates

Rainmaker provides national and international support for commercial real estate syndications via the Tenants-In-Common ("TIC") fractional ownership syndication approach providing the gap funding requirements (difference between total project cost and the construction loan origination amount) for commercial real estate development financings and commercial real estate acquisitions.  In today's competitive capital markets, commercial real estate syndications provide the individual investor with access to the same types of assets and/or commercial real estate development programs that Qualified Institutional Buyers routinely receive.  That's right - the object is to level the playing field for individual buyers and institutional buyers alike through the listing process so that your $25,000 investment accesses the same commercial interests that QIBs routinely receive.

The rules of the road are as follows:

• Holding Periods & Hurdle Rates.  TIC Plan-based syndications can be used for pre-construction phase project financing, construction phase project financing and post-construction phase project financing (permanent financing and/or take-out financing).  The holding period is adjusted for risk on the basis of the following multiples being provided over the S&P 500 trailing 5 year earnings (i.e.: a hurdle rate range of 10% to 14%):

  • Pre-Construction Phase.  Multiple of 1.75 to 2.75 times the SPDR hurdle rate with a holding period not to exceed three (3) years.

  • Construction Phase.  Multiple of 1.50 to 2.50 times the SPDR hurdle rate with a holding period not to exceed three (3) years.

  • Post-Construction.  Multiple of 2.50 and up times the SPDR hurdle rate with a holding period of no less than seven (7) years.

  These hurdle rates are subject to the supply and demand for the commercial real estate syndication market.  Investors and developers will decide what the returns potential has to be in order for a project to acquire all the necessary development financing (or acquisition financing) to allow a given project (or market basket of projects) to move into actual construction.

• Minimum Contract.  The minimum contract is $25,000 and can be rolled into an Individual Retirement Account (IRA) using an option feature to defer taxes and lock-in gains.  This means your expected minimum investment is $25,000.  The minimum syndication amount is $2.5 million (USD) so the minimum investment is typically equal to one percent (1.00%) of the total plan.

• Costs.  Rainmaker does not charge costs for syndication as the syndication aspect of the program is not controlled by Rainmaker. The realestateplays.comsm syndication platform reviews every plan and decides what it is willing to risk¹.  The syndication process is on a strict success basis.  We produce, you produce.  Syndication processes do not include due diligence reports.  If you want Rainmaker to prepare a due diligence report (e.g.: market feasibility study, financial feasibility study, capital funding plan proposals, etc.) you will pay for the report pursuant to Rainmaker's usual and customary commercial terms.

If you have additional questions, please contact Rainmaker Marketing Corporation for a free initial consultation.