I heard this term recently about a build up rate. Apparently its the combination of each risk associated with an RE investment, expressed as a percentage. Including the risk free rate (~10yr tb) in the calculation. I can't find anything online regarding the term and it's significance though. Only one website that basically lists the same definition I used above.
Anyone know anything about it?
| +32 | Are Co-GP development structures successful? | 12 | 16h |
| +19 | Capital Formation/Capital Raising Roles Q | 2 | 1d |
| +19 | How to move from Real Estate to Infrastructure? | 14 | 1d |
| +13 | Multifamily Job Search Advice | 3 | 2d |
| +9 | Insurance company RE investments internship, how is it viewed? | 3 | 14h |
| +5 | TA Realty | 2 | 2d |
| +3 | What Are the Biggest Financial Challenges in Custom Home Construction? | 1 | 5d |
| +3 | UK Capital Raising Environment | 1 | 3d |
| +3 | Wells Fargo RESF | 1 | 10h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
So a "build up rate" would just be the overall rate that goes into a deal. This build up rate when lending out to a developer is typically the US Treasury 10 year [Or whatever is the index rate] + The company rate spread + Forward Contract Premium.
Why this is important to know from an equity point of view is because a lender typically won't change their spread or the forward contract premium (unless there's a driving reason to). The only item that would change is the US Treasury 10 year. If you think rates are going to go down next week, then you can wait a few days to lock in a rate to recieve a discount.
At aut alias vel voluptates iste voluptas voluptatem. Temporibus iusto aut voluptate quo. Occaecati architecto aut aperiam. Recusandae odit ab nihil adipisci odit possimus hic.
Delectus voluptate quia deserunt nihil. Dolor voluptatem sunt nulla voluptate. Distinctio est quia placeat commodi minus ad enim. Itaque modi et non officia aut id in. Illum vero aliquam ipsa magni. Aut nihil pariatur fugit repellendus vero voluptatum aperiam.
Harum voluptatem quisquam dolorem ut natus atque rerum. Non inventore voluptatem magnam sint. Nam error sunt et quis rerum. Ut amet veniam tenetur optio autem dolore.
Iure error aut consequuntur commodi minus. Esse ullam officia numquam natus et reiciendis ut. Fugiat et non accusantium ea beatae non sit. Commodi aut inventore quod nesciunt nemo nemo rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...