Capital Sources

Banks

Iperion Capital has many grounded relationships with banks in the US and Europe. These are national and foreign banks, regional banks, community banks that are financing acquisitions, constructions, rehab, bridge transactions.

Both national and local banks value long-term relationships with their clients. Local banks, in particular, often provide a more personalized service. They may have a better understanding of the local market and can offer tailored solutions based on the specific needs and circumstances of the borrower. Banks tend to offer more flexible loan structures, including various loan terms, interest rate options (fixed or variable), and amortization schedules. Banks offer a wide range of loan products, such as construction loans, bridge loans, and permanent loans, catering to different stages and types of commercial real estate projects. Banks often offer higher LTV ratios, sometimes up to 80%, compared to more conservative lenders like life insurance companies. Banks are heavily regulated and must comply with strict regulatory standards. This can provide an added layer of security and oversight for borrowers, although it might also mean a more thorough and sometimes slower approval process.

Life Companies

Iperion Capital has solidified relationships with a number of Life Insurance companies throughout the U.S.

Life insurance companies typically provide long-term fixed-rate loans, usually between 10 to 30 years. They adhere to conservative underwriting standards and target high-quality properties in prime locations with reliable tenants, ensuring lower risk and sustained value. These companies often finance larger loan amounts compared to other lenders, making them an attractive option for borrowers seeking substantial capital for large-scale commercial projects. Their loan-to-value (LTV) ratios are generally lower, around 50-70%, compared to banks or CMBS lenders. They frequently offer non-recourse loans and competitive interest rates, which can be lower than those from other lenders. However, their loans often include prepayment penalties or yield maintenance provisions. The approval process with life insurance companies tends to be more streamlined, with fewer regulatory and bureaucratic hurdles, resulting in faster and more efficient lending. Additionally, life insurance companies usually retain loans in their portfolios rather than selling them on the secondary market.

CMBS

Iperion Capital has been working with “Conduit” lenders since 2021 and has established strong ties with the largest lenders as well as smaller ones, both financing income producing properties and rehab.

CMBS (Commercial Mortgage-Backed Securities) loans are bundled and sold as securities to investors. This securitization allows lenders to distribute risk and often leads to lower interest rates for borrowers. Typically non-recourse, CMBS loans limit lenders to claiming the property as collateral in case of default, protecting the borrower’s other assets. The standardized underwriting process for these loans facilitates their pooling and securitization, resulting in a more predictable and efficient approval process. CMBS loans usually feature fixed interest rates and higher LTV ratios compared to life insurance companies, sometimes reaching 75-80%. These loans generally have terms ranging from 5 to 10 years and include significant prepayment penalties like yield maintenance or defeasance. CMBS loans are less flexible in structure and covenants compared to bank or life insurance company loans. Once securitized, a servicer manages the loan, handling payments and monitoring performance. As CMBS loans are sold as securities, they are influenced by capital market fluctuations, affecting loan availability and pricing.

Agency, HUD, LIHTC & 501(c)(3)

Iperion Capital works with direct HUD, agency and affordable housing lenders providing very competitive terms for both permanent and construction loans.

Loans from agencies like Fannie Mae and Freddie Mac, and affordable housing lenders are supported by government/state-sponsored enterprises. These agencies primarily focus on financing multifamily properties, such as apartments, senior housing, student housing, and affordable housing. Agency loans typically come with long-term fixed interest rates, often up to 30 years, and high loan-to-value (LTV) ratios, sometimes reaching 80-85% or even 100%. This allows borrowers to finance a larger portion of the property's value with less equity. Many agency loans are non-recourse and often provide competitive interest rates that are lower than those from other lenders. The underwriting and documentation processes for agency loans are highly standardized, resulting in greater efficiency and predictability during approval. Agencies also offer special programs and incentives, like Green Financing for energy-efficient properties, affordable housing initiatives, and support for properties in underserved markets. While agency loans may include prepayment penalties, they usually offer more flexible prepayment options compared to other lenders.

Debt Funds

Iperion Capital has established relationships with a select number of debt funds in the US and Europe that offer an alternative source of financing to traditional lenders.

Debt funds and private equity firms are known for their ability to offer highly flexible loan structures. They can tailor the terms, covenants, and repayment schedules to meet the specific needs of the borrower and the project. These lenders often provide higher leverage compared to traditional lenders. They may offer higher loan-to-value (LTV) ratios and loan-to-cost (LTC) ratios. Debt funds and private equity firms can offer creative financing solutions, such as mezzanine financing, preferred equity, and bridge loans. These lenders can typically close deals faster than traditional lenders due to less bureaucratic red tape and more streamlined approval processes. Debt funds and private equity firms often have a higher risk tolerance and are willing to finance projects that may be considered too risky by traditional lenders, such as value-add or opportunistic investments. While traditional lenders often offer long-term financing, debt funds and private equity firms typically provide shorter-term loans, ranging from 1 to 5 years, come with higher interest rates and fees compared to traditional lenders, and can provide both recourse and non-recourse options.