Market Rate Development
Would it be feasible to use a ground lease and construction financing to fully fund the construciton costs of a market-rate development? Specific numbers aside, wouldn't this be more efficient than finding an equity investor to JV with you?
I would say no.
You ain't getting a 100% LTC construction loan, so you will need equity partners. Most equity (and debt) isn't a fan of ground leases for developments unless it's for ultra prime truly irreplaceable dirt or shitty STNL pad sites. Debt is going to want to know what the exit is and you'll have to take a major discount when selling the property so good luck convincing a lender that this makes sense.
If you’re planning on putting up 35-45% of the capital then sure, you don’t need an equity partner.
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