Covenant targets debt placements of $500,000 to $5 million for the restructuring and recapitalization of apartment assets. As with the equity program, Covenant positions itself in a less competitive niche where it has the ability to react more quickly than traditional large institutional capital sources. Covenant's participating debt provides 80-90% of the gap between senior financing and the borrower's equity for the acquisition or renovation of existing properties. The participating debt program provides financing for borrowers who find it difficult to obtain traditional refiancing due to factors such as prepayment penalties. Debt collateral can take multiple forms including second lien, pledge of corporate stock, or other interests to borrower. 

Property Type:

Multifamily

Loan Size:

$500,000 to $5 million

Max Loan to Value:

90% of value or cost

Deal Types:
  •       Partner buyout
  •       Recapitalization
  •       Renovation/rehab

Geographic Focus:

Colorado to Connecticut

Target Term:

3 to 7 years

Target Returns:

15% interest plus return of principal and participation in excess cash flows and appreciated value, when appropriate.  Return exclusive of a 2% origination fee.

Typical Transaction Structure:

CCG fund is a lender to the entity and takes a second lien on the property or an assignment of partnership interests.

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