Debt, Equity and Co-GP Investment Parameters
GenX Capital’s Private Equity and its partners seek to make GP Equity Co-Investments with seasoned sponsors/developers focused on “best in class” new development, repositioning and value-add opportunities in the five core asset classes across the U.S. Under this structure we provide up to 80% of the GP’s contribution while underwriting the debt with highly competitive terms.
CO-GP EQUITY PARTICIPATION
Example: GP looking to finance $30 million for a value added, hotel acquisition. GenX underwrites the debt component of 70% ($21 million), leaving an equity need of $9MM. Sponsor brings in LP investor(s) for 20% or $6MM, GenX Capital injects up to 80% of the remaining 10% of the GP requirement, allowing the GP maximum leverage on his capital. Thus GenX acts as debt originator while also investing alongside the GP.
NOTES: If our pricing for the debt is not as competitive as what the sponsor can attain elsewhere, we will still participate on the equity side if deal makes sense. Additionally, we prefer the LP investor(s) to be institutional and can assist in underwriting that component if needed. MINIMUM Co-GP invest is $400K with $10MM max.
INVESTMENT CHARACTERISTICS
| Acquisition Pricing | $15 Million to $200 Million |
| Project Holding Period | 24 to 60 Months (2 to 5 Years) |
| Targeted GP Return | 17-20% IRR+ (subject to holding period) |
| Targeted GP Multiples | 2.00x to 3.25x (subject to holding period) |
TYPICAL JV EQUITY DEAL PARAMETERS
| Geographic | NATIONWIDE with primary and secondary market focus |
| Assets | Best in class Multi-family, Hotel, Office, Retail, Industrial, Residential Subdivisions |
| Our Participation | Typically $2,000,000 to $40,000,000 Look for 10-14% Preferred with an 18-22% IRR Prefer 80/20 structures but can get to 90/10 for the right deal. Typically don’t like to be higher than 85% of the total capital stack. |
| Points/Fees | Deal specific, but typically 3-4 points on average, all in. Out of pocket fees typically standard 3rd party reports |
DEBT FINANCING CHARACTERISTICS
| Loan Type | Construction, Bridge, Permanent, Mezzanine |
| Loan Term | 1 to 10 Years (based upon business plan) |
| Rate | 30 Day LIBOR +500-800 for Construction, Bridge, Perm and 11-14%+/- for Mezzanine |
| Loan-To-Value | Up to 85% of acquisition price |
| Loan-To-Cost | Up to 80% of total capitalization/LTC |
| Points/Fees | Typically 2-3 points on average for Bridge and 1-2 for Permanent |
| Recourse | Non Recourse on Bridge and Perm with standard “Bad Boy” carve outs |
Typically can close within 30 days of Term Sheet signature and as fast as 7 days depending on the deal.