Capital markets

Recapitalizations

A recapitalization changes the capital on a property without necessarily changing who runs it. Owners use it to buy out a partner, return capital, deal with a maturing loan or fund the next phase.

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Brokered 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

Restructuring the capital on a property you already own.

Recapitalization means replacing or adding to a property's existing debt and equity. It can be as simple as a cash-out refinance or as involved as bringing in a new equity partner to buy out an existing one.

For owner-operators in healthcare real estate, a recap can unlock value built up through years of operation while keeping the business in place, or it can be the way through a loan maturity that arrives at the wrong moment.

When it fits

Signs this is the right tool.

  • A partner wants out and the remaining owners want to keep the property.
  • The property has grown in value and owners want to return capital without selling.
  • A loan is maturing and refinancing alone does not cover the payoff.
  • The property needs capital for improvements or expansion that current owners cannot fund.

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.

Cash-out refinance
A new, larger loan that repays existing debt and returns capital to owners.
Partner buyout
New debt, new equity, or both, used to purchase a departing partner's interest.
Preferred equity or mezzanine
Subordinate capital to fill a gap between senior debt and the amount needed.
Maturity solutions
Refinance, extension, bridge or a combination when an existing loan comes due.

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.

Current performance
Trailing results that support the new capital, not a projection of them.
Use of proceeds
Where the money goes. Cash-out, buyout and reinvestment are underwritten differently.
Ownership after the recap
Who controls the property and who stands behind the loan once the change is made.
Existing debt
Prepayment terms, lender consents and any restrictions in the current loan documents.

Process

How we work it.

  1. 01

    Read the existing documents

    Current loan terms, prepayment and partnership agreements set what is possible.

  2. 02

    Size the need

    How much capital, for what purpose, and how much of it debt can carry.

  3. 03

    Run the options

    Refinance, new equity, subordinate capital or a sale, compared on cost and control.

  4. 04

    Execute

    Coordinate lenders, partners and counsel through closing.

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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