Pre-Development

Pre-Development Financing

Madison Capital Group works with various capital sources, which understand the pre-development and development process. Madison works with these capital sources to ensure that they are comfortable underwriting the developer, the development concept and the risk associated with pre-development loans. Some of Madison’s pre-development capital sources become so comfortable with Madison’s clients and their developments that the capital sources remain involved in subsequent stages of the development.

Active developers are not only faced with financing development costs on on-going projects, but they are constantly looking for other development opportunities that may exist in the market. Madison Capital Group’s financing experts have worked with many of our long-term clients by providing pre-development financing to cover soft costs such as:

  • Option or earnest money payments on a purchase and sale contract
  • Legal, architectural, planning and other consulting fees
  • Feasibility studies
  • Obtaining permit approvals
  • Making applications
  • Securing construction and financing commitments
  • Marketing costs – in the case of condominium developments

Case Study

Summary Property Data
Name of Property: The Strand at St. John’s Center
Type of Property: Apartment Development
Location of Property: Jacksonville, Florida
Number of Units: 295

Summary Transaction Data
Transaction Type: Development Financing/Land
Pre-development Capitalization: $61.2 Million
Client: American Land Ventures, LLC

THE STRAND AT ST. JOHN’S CENTER

SUMMARY
Madison served as exclusive financial advisor for Miami-based American Land Ventures, LLC in arranging land acquisition and pre-development financing for The Strand at St. John’s Center, a mixed-use development to include 295 luxury rental apartment units, approximately 250 luxury condominium units, and over 100,000 sqft of office and retail space. The first phase, The Strand at St. John’s apartments will be a 295-unit luxury partment community offering breathtaking views of the St. John’s River from virtually every unit. It is located amidst numerous employment corridors in the Jacksonville CBD and minutes from the San Marco neighborhood, which is known for dining, shopping and entertainment. The Project will include 30 residential floors with town homes, lofts, one, two and three bedroom floor plans, and upgraded penthouse units on the 29th and 30th floors. The Strand at St. John’s will provide superior
amenities including a grand lobby with a twentyfoot glass wall, panoramic views of the Jacksonville skyline and St. John’s River, a large eighth floor swimming pool, a wellness center with massage therapy and other spa services, and other luxury amenities. Between the apartment and condominium towers, a pedestrian plaza will create a park-like setting for the project and the riverwalk.

MADISON ADVANTAGE
In addition to arranging land acquisition and predevelopment financing, Madison was able to further satisfy American Land Ventures’ predevelopment and development financing needs
for this specific phase by arranging early stage joint venture equity, private equity and nonrecourse, unsyndicated construction financing while optimizing their returns. The firm has also made a principal investment in the $61.2 million, 295-unit luxury high-rise apartment community to be built on the south bank of the St. Johns River in Downtown Jacksonville, Florida. The Strand at St. John’s Center is another example of Madison’s ability to structure complex development transactions with multiple capital sources to provide the optimal capitalization for the needs of a multiple-use project.