🏗️ Case Study 3: Ground-Up Construction Financing

An experienced real estate developer sought financing for an ambitious, $18 Million ground-up multi-family development in a secondary market with high growth potential. The challenge was two-fold: securing the substantial construction loan and ensuring the lender understood the specific needs of the project, particularly regarding the timeliness of draw requests. In construction, slow funding can halt work, leading to massive cost overruns and contract breaches.

The client needed a partner who could secure a high-leverage construction loan and actively manage the capital flow throughout the 18-month build phase.

We leveraged our deep connections within the specialized private and non-bank lending sector that focuses exclusively on development and construction risk.

1. Specialized Capital Placement: We positioned the deal with a regional fund manager known for aggressive construction lending and high Loan-to-Cost (LTC) ratios in this specific asset class.
2. Phase-Based Structuring: We structured the financing with a clear phased draw schedule (horizontal and vertical construction), guaranteeing capital availability contingent upon meeting specific construction milestones. This minimized risk for the lender while maximizing control and access for the developer.
3. Exit Strategy Integration: From Day 1, the construction loan included terms and conditions that seamlessly paved the way for a post-stabilization Permanent Take-Out Loan (conventional bank or CMBS), providing the developer with certainty regarding their long-term financing solution.
4. Draw Management Protocol: BCF established a direct communication protocol with the construction manager and the fund manager to expedite the required site inspections and funds release, ensuring vendors were paid quickly.

BCF Commercial Capital secured the $18 Million construction loan, backed by a precise draw management system.

The key benefits delivered to the client were:

• Timeline Adherence: The developer maintained control of the build schedule because they experienced zero delays related to capital disbursement.
• Optimal Leverage: The deal was structured to meet the high LTC ratio the developer required, minimizing the amount of equity they had to inject upfront.
• Full Lifecycle Partnership: The client now has a pre-planned path from construction to permanent, stabilized debt, securing the entire capital lifecycle of the project through BCF Commercial Capital.

This case study demonstrates the power of pairing BCF’s deep banking expertise with direct access to Ground Up Construction lenders and Financial Partners to get your project started and completed.