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Often times the secret is in the structure when dealing with large commercial opportunities. We pride ourselves on the ability to innovate for our partners by accessing a myriad of our institutional and private sources to create capital stacks to simply work in attacking almost any scenario across any commercial asset class.

 

Give us an overview of your project, and we’ll provide you with feedback as to whether or not we can help typically within 24-hours.
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  • Oct 22, 2019

    Create instant equity through a high level ground sale

    Harvest Capital has helped to develop a unique ground sale and leaseback strategy that allows buyers and owners to procure commercial income-producing properties with up to 90% leverage.  We’ve made the barrier of entry to owning hospitality, office building, retail, and industrial properties lower than ever before.

  • Oct 22, 2019

    What is a ground lease?

    One consequence of a new ground lease is the creation of two distinct estates in the same parcel of land: the landlord’s fee interest and the tenant’s leasehold. With an unsubordinated ground lease, the landlord’s fee and the tenant’s leasehold can be separately bought, sold or encumbered, and each will support separate ownership and financing structures without materially affecting the other.

    In summary, Harvest Capital will facilitate the sale of the ground underneath a property giving you immediate cash equity typically between 40% - 60% of the total asset value in exchange for a 99-year lease to the owner/buyer and a buy back provision at year 30. 

  • Nov 8, 2019

    Commercial Property Type

    Hotels

    Tenant commercial

    Multi-family

    Select single tenant

  • Oct 22, 2019

    Financing

    Ground Lease purchase from preferred:

    $7MM and up.

    Capped at 70% LTV.

    Capped at 50% of NOI (net operating income), unique as Ground buyers typically cap at 25% of NOI.

    5.50% Cap rate expected with modest annual bumps.

    99-year ground lease renewable for another 99 years. 

    Repurchase option in year 30.

    If income drops below 1.3x coverage of ground rent, tenant must deposit 1 year of rent escrow.

  • Oct 25, 2019

    Advantages

    No principle payments (ever).

    Perpetual financing – no interest rate risk.

    Easily transferrable with the property. No assumption process.

    No PG required.

    No TI’s/Escrows/Reserves other than taxes paid in advance, generally.

    No mortgage. The allows for owners to put additional leverage in the form of leasehold at closing or in the future, generally up to a combined LTV of 85% - 90%.

    With leasehold leverage:

     - No cross default

     - No acceleration of principle

    Land has no depreciable basis. Therefore, owners keep 100% of the depreciation.

    Can close quickly.  Typically 6 weeks.

  • Oct 25, 2019

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