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Syndications are the real opportunity in a recession that can beat the odds and senior housing is the industry to do it with...

 

 

Retail Market Feasibility Studies - Continued...

The first question every new Rainmaker client asks is, "why do we need a market feasibility study?"  The answer lies in the way in which we go about deciding whether a given investment opportunity is deserving of funding support.  The person who does this is the underwriter.  The underwriter's job is to investigate the various issues surrounding a loan request (or equity float, as the case may be) to determine whether the risks to investment loss are outweighed by the potential economic gains.  The underwriter only gets into real trouble by accepting the risks for a given transaction and then that transaction becomes a non-performing asset.  So...  the underwriter only gets into trouble by saying "yes"; therefore, "no" is the starting position (i.e.: "prove to me that I should say something other than "no").  The underwriter will exercise "all due diligence" regarding the underwriting process requirements for investment approval.  The term, "all due diligence," is a legal term and it means that no stone should be left unturned - you only walk on the pebbles.

The underwriter knows the business will be developed, constructed and operated within the market capitalism envelope where the winners and losers are picked by the consumer, so it helps to know:

What attributes of the project are being mirrored by the market?

What relative revenues will the project likely be able to generate?

What services, amenities and project physical configurations will the market require the project to provide?

Very simple questions.  The market feasibility study created for the retail marketplace will provide the following answers that are interpreted in terms of the key questions:

Revenues (sales/s.f., sales by retailer, leasing rates, CAM rates, gross sales participation rents)

Traffic counts (indicators that can be used to compare the relative sales of different locations for the purposes of creating statistically-significant tenant sales levels)

Absorption (indicators of sales saturation levels and lease-up of spaces)

Store size (based upon peer-group sales/s.f.)

Tenant improvement allowances (indicators of costs of leasing the project)

Retail groups (ranking of retail segments for the purposes of creating the leasing information packages)

Services and amenities (what consumers may require in terms of common areas, services, amenities and related project development items)

The answers to these questions are played out through the feasibility process and result in the capital funding plan that is used to solicit lender participation in the developer's project.  Talk to Rainmaker and get a complete program that gives you the edge in capital funding.

About Rainmaker...

Rainmaker Marketing Corporation is the brainchild of Clint Lovell, a seasoned business finance consultant with more than 20 years experience.  Rainmaker is a B2B consulting firm that was incorporated in 1994 for the purposes of providing market feasibility studies to businesses seeking capital financing in the commercial and institutional markets.  Today, Rainmaker Marketing Corporation provides a comprehensive array of due diligence documentation services for most major industry groups.  Rainmaker Marketing Corporation also provides syndication management services for fractional commercial real estate syndicates that can provide mezzanine gap funding for income-producing commercial property developments as early as the pre-construction phase.  Rainmaker Marketing Corporation serves clients throughout North America and the Caribbean Basin.

Rainmaker Marketing Corporation, Inc.

15519 Dawnbrook Drive, Houston, Texas 77068

281.537.1200  

consultants@rainmakermarketing.com

© Copyright, 2009 Rainmaker Marketing Corporation, Inc.  All rights reserved.

 

A Few Words on Change...

Clint Lovell, the Managing Principal of Rainmaker, has written a book on the subject of capitalism and the creation of a new economic society that ends our reliance on taxation and retires all of our national debt.  The book is called The Fix and you can order an advance copy now at www.the fixbookstore.com.  Order today and we'll pay your shipping, saving you some real change. 

What's New...

Read our latest whitepaper on capitalization strategies and commercial real estate syndications that provide developers with a new arsenal of capital finance weapons they can deploy in the middle of this recession.  Click here and download the whitepaper free! 

 

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