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Securing capital for commercial real estate

As many commercial real estate developers in Maryland understand, the vagaries of the commercial real estate market means that they, unlike other types of entrepreneurial start-ups, must secure their funding in full prior to ever breaking ground on a new project. There are several things that developers should do when they are trying to attract investors for their project in order to make it likelier they will receive their needed capital.

One of the most important things real estate developers must do is to fully disclose everything and to remain very transparent. This means clearly outlining all of the potential risks in the package they put together to attract those investors who are interested in their project's risk level. Some investors prefer higher-risk projects, while others are looking for lower-risk investments. Disclosing the risks can help avoid being matched up with an investor who is inappropriate for the venture and avoid legal disputes later on.

Developers should also include clear projections about their expected returns in their package for potential investors. While some are reticent to do so, investors pay attention to numbers. A clearly laid out plan for the building and long-term goals should also be included. Insider information about the neighborhood and market is important to include, as is highlighting their team's experience and previous successfully completed projects in a results-oriented fashion.

Securing investors for a commercial real estate project does not need to be overly complicated. Developers may want to seek guidance from a real estate attorney for help with putting together a well-crafted and thorough investor package. An attorney may be better able to help with making certain the market analysis and business plan is complete and accurate. Legal counsel may also help to make certain everything is drafted and presented in a clear and precise manner to make it more likely funding will be secured.

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