Interesting one....curious what you guys think..cheap enough to make most deals work...but could be a double-edged sword
I said ground-up Class A MF with my reasoning but curious what you guys would do
I'm sure this type of financing is also commonly available to HNW and FOs
buy ground leases
Buy NNN leases to the most secure tenants in the most desirable locations where getting re-leased is easy in the event of a vacancy.
You're sure this type of financing is commonly available?
You'd do ground-up deals with 100% recourse?
Holy freaking smokes
Amazon leased industrial buildings - easy coupon clipping.
Multifamily buildings in a core market with 100% project based section 8 coverage. Just arbitrage the spread between my 1% and interest and the guaranteed 4% cash on cash I get from my government-backed rent roll.
Is given basically free cost of capital but with full recourse and you say ground up development....Kind of defeats the purpose of all the low cost capital you were given.
Really what you want to do is arbitrage it. Buy a huge fucking stabilized MF or multi tenant industrial portfolio. One that theoretically would have very little chance of cashflowing under 1% yield and take the vig.
Any asset class I would borrow $1 billion at 1% and buy UST's at 1.5%.
Why do you think this? UST's are yielding higher than 1% and are fully recourse to the US Goverment. Also the whole point of "investment grade" real estate is that debt is typically non-recourse (at worst partially recourse for shit like suburban office).
Vig?
vig is just a term guys from New Jersey use to describe some sort of profit taken by the guy in the middle on an arrangement of money
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