How Corporations Can Use Real Estate To Access Untapped Capital

Written by Mike Myatt

Continued from page 1

Credit Tenant Property Can Provide Similar Financial Benefits Torepparttar Issuance of Corporate Bonds: If a business is deemed to be a credit tenant or its financial equivalent its corporate real estate assets can be effectively be used to secure management-free cash flow with exceptional liquidity and high leveragability performing like corporate bonds while preservingrepparttar 145976 benefits that real property offers. Because ofrepparttar 145977 secure character of credit tenant property investments, properties can be leveraged far more highly than traditional real estate. Based onrepparttar 145978 lease guarantee byrepparttar 145979 tenant, non-recourse financing may be arranged with a 1.0 debt coverage ratio, llowing for financing Up to 100% loan to value. Income from an investment grade tenant overrepparttar 145980 length of a multi-year lease offers reliable returns comparable to those of corporate bonds. Credit tenant leases are usually written for terms ranging from 10 to 25 years. Lengthy terms eliminate concern about tenantturnover normally associated with real estate ownership.

Near-Zero Volatility: Many ofrepparttar 145981 corporate real estate programs today offer fixed rent structures providing full inflation protection. Becauserepparttar 145982 key value determinant of credit tenant property isrepparttar 145983 long-term corporate guarantee, this asset does not experiencerepparttar 145984 cycles affecting other real estate markets. Long-term, highly leverage financing removes interest rate risk and minimizes pricing volatility. Circumstances affecting traditional real estate, such as changes to surrounding property, local politics and market swings have little impact on credit tenant property values.

Liquidity: The long-term corporate guarantee of rental income and expense coverage combined withrepparttar 145985 tenant-based financing enable corporate real estate assets to be traded with exceptional liquidity not typically associated with real property. Most lenders will allow businesses to convert existing fixed real estate assets into cash at fair market value at what may be a premium over book value. Funding can also be used for new construction includingrepparttar 145986 cost ofrepparttar 145987 land acquisition. Proper use of corporate real estate as a financing tool will eliminaterepparttar 145988 need for a business to tie up capital or credit in land or buildings.

A wide variety of sale leaseback structures are available from lenders who have a practice area dedicated to corporate real estate finance. When developing your capital formation strategy make sure you evaluate corporate real estate assets as a viable vehicle for accomplishing your goals.

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Mike Myatt is Executive Managing Director of Pacific Security Capital, a leading commercial real estate investment banking firm providing commercial real estate loans, structured finance, investment sales and advisory services. Contact Pacific Security Capital at 1-800-844-6085 or by visiting the company website at

TR Cutler Featured in June InMFG and Managing Automation

Written by Thomas Cutler

Continued from page 1

Cutler continues to serve asrepparttar editor ofrepparttar 145936 quarterly publication Manufacturing Profiles and authors more than three hundred feature articles annually for more than two hundred publications.

Thomas R. Cutler also serves asrepparttar 145937 lead spokesperson forrepparttar 145938 ETO Institute (

Cutler isrepparttar 145939 founder ofrepparttar 145940 Manufacturing Media Consortium™ consisting of more than two thousand journalists worldwide writing about trends inrepparttar 145941 manufacturing sector. Cutler isrepparttar 145942 author ofrepparttar 145943 best-selling Manufacturing Directory, The Manufacturer’s Public Relations and Media Guide. Cutler is a national public speaker regarding manufacturing marketing, and recently announcedrepparttar 145944 August 2005 launch of PR Advantage™ -- an affinity PR program for Manufacturing Associations and their members.

# # # TR Cutler, Inc. 954-486-7562


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