Capital
Debt & Equity Financing
The Marcil Group provides real estate developers with a reliable and efficient source of equity and debt capital. The company's co-founders possess nearly 20 years of combined experience in the venture capital and commercial real estate industries. The Marcil Capital Group investment partners bring diversified backgrounds and skill sets to develop a unique investment strategy. Combining flexible capital with creative deal making allows the company to offer a different investment philosophy than other investment groups.Successful real estate investing requires both short and long-term capital resources.
Marcil Capital offers short-term "merchant build" strategies in which the equity capital provider is generally liquidated within two to five years. However Marcil Capital is primarily focused on holding properties for longer periods of time in order to capitalize on recurring income streams and longer-term value creation. Marcil Capital investors are predominantly high net-worth individuals, investment funds, and families who are interested in making direct investments in real estate development projects and are attracted to both long term and short term investment periods. Our investors are looking to participate in the returns that the real estate development process can yield, as well as the tax advantages that result from direct ownership. Marcil Capital targets projects requiring an equity investment up to $5,000,000 per project.
Our investment strategy is squarely focused on value creation opportunities (i.e., "ground-up" development or the substantial redevelopment of existing assets) with a concentration on multi-family, commercial lease backs, build to suit, mixed-use, and office projects. Our approval process is streamlined compared to other sources of equity capital. Fund investments are oriented to pre-defined investment criteria acceptable to our investors. All investment decisions are made by a five person board of directors in each fund.
Our Philosophy
Marcil Capital is a series of private equity funds that are tailored to our collective real estate experience, investment objectives and development styles. Each fund is established to address a specific market investment opportunity from short to long term. Each fund is balanced for risk tolerance and return objectives. Our primary goal and objective is to provide long term real estate financing, yet through the development process there are opportunities and needs for short term capital investments such as construction and redevelopment loans. The vast majority of the equity capital providers in the industry are focused exclusively on short-term investment strategies. Our investment philosophy, and what differentiates Marcil Capital, is our ability to make longer term investments with more flexibility, and typically longer timeframes, to assure our Developer Partners that we have an alignment of interests with them to maximize a project's value. Our belief is that, over time, compounding and leverage allows solid real estate to realize better returns than most other investment opportunities. As opposed to the philosophy of other investors who focus exclusively on the short term, invest for fees, and sell to maximize the internal rate of return created during a short holding period, our philosophy is to invest in value creation opportunities (i.e., "ground-up" development and/or the substantial redevelopment of existing assets), typically with longer holding periods, in order to capitalize on recurring cash flow and long-term appreciation. We will consider the sale of an investment after a short holding period to take advantage of compelling market conditions; however, we are not generally interested in a short-term investment strategy to simply maximize the internal rate of return. Marcil Capital is interested in investing in income-producing properties with a concentration on multifamily and commercial projects. Other property types and opportunities with compelling and well-defined strategies will be considered. We are focused on opportunities that are sponsored by solid developer partners with strong property type and market knowledge and experience.
Investment Parameters
Marcil Capital is a series of private equity funds, focused on providing real estate developers with a reliable and efficient source of flexible capital. The Fund's objective is to align its investment strategy and investment timeframe with Developer Partners whose goals are to build value through longer holding periods. The following is an outline of the Marcil Capital general investment parameters.
| Property Type: | The Fund is focused on multi-unit residential, retail and office projects. Other property types will be considered on a select basis. |
| Property Description: | The Fund is seeking to invest in value creation opportunities through the development of new assets or the re-positioning/re-development of existing assets. |
| Developer Partners: | Real estate professionals with strong local market knowledge, development/re-development expertise, and proven track records. |
| Project Locations: | The Fund will consider any geographic location within the continental United States, however the fund primarily makes investments in the upper Midwest. |
| Individual Investment: | $100,000 to $5,000,000. Larger and smaller investments will be considered on a select basis. |
| Fund Investment: | The Fund will provide up to 90% of the required equity and the Developer Partner will be required to contribute a minimum of 10%. |
| Investment Period: | Between 3 months and 10+/- years depending on the fund. Generally, the Fund objective is to refinance the Project upon stabilization in order to return all or a portion of invested capital with an eventual exit through the sale of the asset at the conclusion of the first refinance period. |
| Ownership/Management: | The Fund and Developer Partner will form a new single purpose entity. The Developer Partner will be the managing member/general partner and will be responsible for the day-to-day operations. The Fund will be the member/limited partner and will have approval rights with respect to major decisions. The Developer Partner shall be responsible for providing any guaranties required to secure construction and/or permanent financing for the Project. Individual(s) and/or an entity acceptable to the Fund shall provide the Fund with a guaranty of completion, guaranty of cost overruns, and a guaranty for standard non-recourse “carve-out” events. |
| Distributions: | Preferred Return: The Fund and the Developer Partner shall receive a pro rata preferred return between 8% and 10% from operating cash flow or, if cash flow is insufficient, the preferred return shall accrue on a non-compounding basis. Excess Cash Flow: After payment of the Preferred Return, excess cash flow shall be distributed so the Developer Partner receives a promoted interest in the distribution. Sale and/or Refinance Proceeds: After payment of the preferred return and the return of all original invested capital, sale and/or refinance proceeds shall be distributed pro-rata so the Developer Partner receives a promoted interest in the distribution. |
| Target Return Parameters: | Through the Distribution of cash flow and refinance proceeds as defined above, the Fund is seeking to achieve the following: 1) Excess proceeds at the time the asset is re-financed shall be adequate to pay all accrued and unpaid Preferred Return and to return at least 50% of the original invested equity. 2) After the asset is re-financed the Fund's share of the project's cash flow shall initially provide a cash on cash return of at least 18% on the Fund's residual equity. |
| Origination Fee: | Marcil Capital will earn an Origination Fee of two percent (2%) of the Fund Investment. The Origination Fee will be capitalized into the project budget and paid at closing. |
| Transaction Expenses: | The expenses relating to the appraisal, feasibility study, travel, legal, reviews of third party reports, plans and specifications and project documentation shall be capitalized into the project budget and paid at closing. |
Just Released!
The Marcil Group Inc. Completes Equity Financing for One Oak Place
5-25-2007 -The Marcil Group Inc. has provided $1,500,000 of equity financing for One Oak Place in Fargo North Dakota. Phase 1 construction for this new $16MM facility was completed in October of 2007. The facility will include 127 upscale senior market rate apartments and a variety of other services. Phase 2 will include an additional 160 units.