All Forum Posts by: Vassilios Kovanis

The idea wouldn't be to sell shares at high valuation, but rather increasing our return on invested capital and releasing some equity for other deals. Another low risk approach could be tying up a new smaller deal that we could close ourselves should the equity raise fail. 

The other problem i have with the standard syndication model is that it puts us at a severe disadvantage when competing for deals. A 90 days escrow with a bunch of contingencies won't cut it in the industrial space where REITS can close in a heartbeat. This is why closing a deal with our own balance sheet first and raising capital afterward without the pressure of a 90 days escrow seemed an attractive model to get started with syndication, albeit limiting i concede 
 

My partner and I have been doing well for the past 8 years developing and repositioning industrial properties using our own capital.

We are now considering scaling up by raising funds through 506 offerings, and studying the different ways to get our foot in the door

The biggest obstacle being our lack of investor relationships and track record as sponsors, we were thinking about syndicating existing, on going deals we currently manage in our portfolio, rather than committing to a large deal we could potentially fail to close.

The rational behind this is that a deal already under management with in place, favorable financing could present a lower risk profile for prospective investors and therefore may make a capital raise cheaper and easier. I realize that raising equity for smaller deals may prove costly and time consuming but it seems an acceptable price to pay to build investor relationships.

Can someone explain how this could work and if the whole thing makes sense?