Project Investment Criteria
|Hotel Resort Parameters||
|Site Ownership||Prefer fee simple land but will consider longer-term economic leaseholds (minimum 60 years)|
|Project Profile||New developments with a build out value of $75 M to $250 M|
|Brand Profile||Market driven choice at a Five-Star level|
|Target Investment Returns||Leveraged returns of 18% to 25% at a (55-65% Loan to Cost)|
Project Funding Needs
For each real estate project chosen for investment by Landsvest, the three levels of acquisition financing required are set out in terms of their priority. For this purpose the need for future working capital financing such as operating lines of credit are not considered.
The level of financing and the terms being offered to both equity investors and debt providers are established in a framework and structure that complement each other. The risk level and the term of the investment or loan in months and years are evaluated to determine the proposed terms and conditions relevant to each financing type that are being offered. Compliance with the securities rules and regulations related to the raising of money are conscientiously evaluated and adhered to.
The three levels of acquisition financing required for most projects are comprised on the following:
- Short term Acquisition Financing – generally required to finance the initial deposits on acquisitions and fund the capital requirements for “soft costs” and light construction costs until the next levels of financing are available. This financing can be represented by preferred share equity, term loans or any combination.
- Equity Capital Financing – generally required as longer term patient capital to appropriately establish debt to equity levels and repay where needed, the short term acquisition capital previously provided
- Senior Debt Financing – required to fund the capital construction or capital component of the acquisition, structured as long term debt based on a reasonable leverage basis, and repayable on defined terms