NetLeaseX Capital, a Cincinnati, Ohio-based investment banking firm, has launched a preferred equity platform to help real estate investors and developers (Sponsors) raise preferred equity so that they can close more deals and earn more fees.
Unlike crowdfunding websites, NetLeaseX does not market its structured investments to multiple investors. Instead, NetLeaseX works with Sponsors to source joint venture capital by structuring investment relationships with NetLeaseX’s “below the radar” high-net-worth investors and family offices.
By utilizing capital from NetLeaseX’s private investors, Sponsors are assured of: speed and certainty of execution, discretionary underwriting authority, no syndication risk and working with experienced investors who invest their own capital and who have longer investment horizons than fund managers and retail investors
Although NetLeaseX works with institutional investors and developers, NetLeaseX’s investors also invest with non-institutional (and even first-time sponsors) who have industry experience but need capital.
“Preferred equity is probably the least understood layer of commercial real estate financing and the most difficult to raise in a property’s capital stack,” said Ron Zimmerman, founder and CEO of NetLeaseX Capital. “NetLeaseX’s preferred equity platform enables real estate investors and developers to showcase their projects to an ever-increasing number of high net worth and family office investors. This is especially important in today’s market where increasing interest rates make maturing CMBS and other senior loans difficult to refinance. Sponsors need to raise additional capital in order to extend their loans at the lower interest rates on their current loans, failing which they risk default on their loans and lose their properties.”
