We effectively position green buildings in the financial markets where we translate design, marketing, and operational strategies into language understood by the financial markets. This creates the greatest opportunity to achieve the best financing terms possible.

Permanent loans can be structured with either a fixed interest rate or a floating interest rate, the selection of which should be based on the required loan term and the project's ability to cover debt service obligations in a rising interest rate environment.

Short-term loans (mini-perms) are best suited to a 3-1-1 floating rate structure while longer term loans generally fit into a fixed rate structure with spreads based on the 10-Year Treasury rate. When choosing between a fixed or floating rate structure, consideration must be given to which direction interest rates are likely to head as well as the project sponsor's ability and desire to assume interest rate risk in exchange for a lower upfront rate.

It may be determined that a floating rate structure is more advantageous to a particular investment strategy given prepayment options and other considerations. In this scenario, there is always the opportunity to purchase an interest rate cap or swap, effectively capturing the benefits of a floating rate structure while mitigating future interest rate volatility.

Certain lenders and loan structures are more flexible than others. It is important to understand the various constraints within each structure including prepayment clauses, lease approval requirements, renovation approval requirements, as well as what constitutes a material change to the property and the process(es) for implementing these changes.

Given these various constraints, it is important to pursue many different lending sources before finalizing the loan decision.

Please contact us to discuss financing your requirements and strategy.