Capital markets
Construction financing
A construction loan is underwritten on a plan, so the plan has to hold up. We help developers present budget, schedule, operator and exit in the form a construction lender expects.
Request financingBrokered by eXp Commercial, LLC · CCGX arranges and advises on financing; loans are provided by third-party lenders · Subject to lender approval · Not a commitment to lend
What it is
Debt for ground-up development and major repositioning, from construction through take-out.
Construction financing funds the hard and soft costs of building or substantially renovating a property, drawn down as work is completed. It is usually followed by a permanent loan that pays it off once the property is finished and producing income.
For care facilities, the period between completion and stabilization is longer than in conventional real estate, because state licensing follows construction and occupancy builds over time. Construction lenders size the loan around that.
When it fits
Signs this is the right tool.
- You control a site with the zoning and approvals in place, or a clear path to them.
- You have a budget, a schedule and a contractor a lender can evaluate.
- There is an experienced operator committed to running the facility once it opens.
- You are converting or substantially renovating an existing building to a new use.
Typical structure
How it is usually put together.
Described in general terms. Actual structure, pricing, leverage and terms are set by each lender or capital partner for each transaction.
- Construction loan
- Funded in draws against completed work and verified by inspection. Interest is typically carried during construction.
- Construction-to-permanent
- A single loan that converts to permanent debt after completion, or a separate take-out loan arranged in advance.
- Reserves and contingency
- Lenders commonly require contingency in the budget and reserves for interest and lease-up. The amounts are set by the lender.
- Guaranties
- Completion and payment guaranties from the sponsor are standard in construction lending and are part of the credit decision.
Underwriting
What lenders look for in healthcare real estate.
Senior housing and behavioral health carry licensing and operating risk that a lender reads alongside the real estate.
- Sponsor and contractor track record
- Comparable projects completed on budget, and the financial capacity to stand behind the guaranties.
- Entitlements and licensing path
- Zoning, use permits, building permits and, for care facilities, the state licensing sequence after completion.
- Operator
- Who will run the facility, their experience, and how the operating agreement or lease is structured.
- Lease-up assumptions
- How quickly census builds and what the facility needs to cover costs while it does. Lenders stress this.
- Exit
- The take-out: which permanent loan or sale pays off the construction loan, and whether the stabilized numbers support it.
Process
How we work it.
- 01
Review the project
Site, approvals, budget, schedule, operator and the stabilized pro forma, read the way a credit committee will read them.
- 02
Frame the capital stack
How much of the cost can be debt, what the sponsor contributes, and whether a gap needs other capital.
- 03
Package and submit
Budget, plans, contractor information, operator background, market support and the exit, assembled consistently for each lender.
- 04
Compare and negotiate
Draw mechanics, reserves, guaranties and conversion terms matter as much as pricing.
- 05
Close and track draws
Coordinate closing conditions and keep the take-out plan current through completion.
Next step
Request a capital review.
Tell us about the property and what the capital is for. A CCGX advisor will review it confidentially and tell you what looks financeable and roughly where.
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