Real Estate Finance
Shaping The Future
of CRE Services
HHKirby Real Estate Finance is the culmination of more than 30 years in Finance. Early career opportunities included fixed income securities and municipal bond underwriting. Throughout the years, I've executive managed finance in industries as diverse as software development, beverage manufacturing and filmmaking. In 2010, I began a career in real estate and soon found a niche providing critical financial analysis to real estate professionals and commercial real estate developers. Following the introduction of Qualified Opportunity Zones in 2017, I formed Carolina Opportunity Funds which secured capital for Opportunity Zone projects in tertiary markets throughout North Carolina.
I introduced HHKirby Real Estate Finance to provide cost effective real estate financial services to commercial real estate developers and brokers seeking to maximize project value and investor returns.
Successful commercial real estate projects require the ability to execute three primary, but very different, components - Entitlement, Capital, & Community.
Commercial real estate entitlement refers to the process of obtaining the necessary approvals and permits from government agencies to develop a piece of land for commercial use. This process can involve a variety of steps, including rezoning the land, obtaining environmental clearances, and securing necessary permits for construction. The goal of the entitlement process is to ensure that the proposed development complies with all applicable laws and regulations and is consistent with the local community's needs and priorities. Once all the necessary entitlements are obtained, the developer can proceed with the construction of the commercial project. The entitlement process can be lengthy and complex, requiring significant resources and expertise to navigate successfully. However, it is an essential step in developing a successful commercial real estate project.
Commercial real estate capital stacks refer to the different types of financing used to fund a commercial real estate project. A typical capital stack includes a combination of equity and debt financing from various sources, such as banks, private investors, and institutional lenders. Equity financing typically involves contributions from the project's sponsors or developers and can also include investments from outside investors in the form of preferred equity or common equity. Debt financing, on the other hand, involves borrowing funds from lenders, which can include traditional commercial mortgages, mezzanine financing, or other types of debt instruments. The capital stack structure is designed to balance risk and return for all parties involved in the project, with equity investors typically taking on higher risk but also having the potential for higher returns, while debt lenders provide lower risk but generally lower returns.
Community involvement is essential in commercial real estate development as it ensures that the project is aligned with the needs and priorities of the local community. When developers engage with local stakeholders and community groups, they gain valuable insights into the community's concerns, preferences, and expectations. This information can help developers design and build projects that meet the community's needs and are well-received by residents. Community involvement can also help to mitigate opposition to a project, particularly in cases where the proposed development may impact the local environment, traffic patterns, or other community assets. By engaging with community members early and often, developers can build trust, foster positive relationships, and address any concerns or objections that may arise during the development process. Ultimately, community involvement can lead to more successful and sustainable commercial real estate developments that benefit both the developer and the local community.
I provide in-depth financial analysis and modeling to help clients make informed decisions about their investments, evaluate the financial viability of potential investments and assess their risk. Real estate proformas are an essential tool for anyone involved in the real estate industry.
The financial model I create helps real estate professionals make informed investment decisions by providing a comprehensive view of the potential investment's financial performance. The financial model includes key financial metrics such as net operating income (NOI), cash flow, debt service coverage ratio (DSCR), and internal rate of return (IRR). These metrics are essential in evaluating the financial viability of a potential investment and assessing its risk.
Capital Stack Parity
Properly structuring a commercial real estate capital stack is critical to ensure that the project is adequately financed and can generate sufficient returns to meet investor expectations while minimizing risk.
Capital Stack Parity balances risk and return for all parties involved in the project. Capital Stack Parity requires a firm understanding of the link between the Internal Rate of Return (IRR) and the Weighted Average Cost of Capital (WACC) in property investment also known as the required IRR. This is accomplished through multiple iterations of "what if" scenarios. I analyze interest rates, CAP rates, debt to equity WACC, market rent rates, as well as development spreads, residual land value and discounted cash flow to determine what balance of risk to return are possible for a specific commercial real estate project.
A well-prepared investment deck can help real estate developers and investors secure the funding they need to bring their projects to fruition and generate strong returns for their investors. Decks provide a comprehensive overview of the real estate project, including the property's location, size, and current condition, as well as the planned renovations or upgrades. The deck also includes a detailed analysis of the market opportunity and demand for the property, including demographic data, trends, and projections.
The investment deck highlights the project's financials, the proposed funding structure as well as projected revenue streams or rental income and investor returns on multiple metrics. The deck also provides details on the management team, their experience and qualifications, and their track record of success in similar real estate projects.
I strive to present an investment opportunity in a visually appealing style that provides clear, concise messaging that resonates with potential investors. I utilize high-quality images and graphics that help bring the real estate project to life, a consistent layout and design that enhances readability and improves overall user experience.
Fund Management involves the process of securing the funds required to acquire, develop, or refinance commercial real estate properties. Securing the right financing can be challenging, especially in today's market. Through an extensive network of investors, lenders, and other financial institutions, I strive to help clients secure the financing they need on the best possible terms.
Fund Management services include:
Equity financing: I work with a wide range of investors, including private equity firms, high-net-worth individuals, and family offices, to help clients secure the equity capital they need.
Debt financing: Arranging debt financing from a variety of sources, including commercial banks and private institutional lenders.
Mezzanine financing: Mezzanine financing is a hybrid financing option that combines elements of both equity and debt financing and can be an effective tool for raising the necessary capital for a commercial real estate investment.
Joint venture partnerships: Joint venture partnerships can provide additional capital, expertise, and resources to help our clients maximize their investment returns.
In addition, HHKirby Real Estate can assist in setting up a real estate investment fund including entity registration and investor relations through its third party fund administration partners.
Engagement Agreement available upon request.
Deep Industry Knowledge
Commercial real estate development involves the construction or renovation of properties for commercial use, such as office buildings, retail centers, and industrial parks. It requires a specialized set of skills and knowledge, including understanding of zoning laws and regulations, market analysis, project management, and financing.
My success in commercial real estate finance stems from an ability to help industry professionals identify promising development opportunities, assess the financial feasibility of a project, secure financing, and review construction budgets and tenant leases. In addition, a deep knowledge of commercial real estate leasing and property management trends is essential for assessing the long-term viability of a project.
Years of Experience
With ten years in commercial real estate and over 30 years of experience in financial modeling and analysis, my background in finance is a valuable asset in many industries. A strong foundation in financial theory, as well as the ability to apply that knowledge in practical, real-world situations translates into providing real estate financial services that are cost effective, comprehensive and cohesive.
With years of experience in financial modeling and analysis, I've worked with a variety of financial models, including cash flow projections, discounted cash flow analysis, proforma, and risk modeling.
In addition to technical skills, my years of experience in financial modeling and analysis have produced strong analytical and problem-solving skills. I am able to identify key drivers of financial performance, assess risks and opportunities, and communicate insights to stakeholders in a clear and concise manner.
As the industry is constantly evolving I'm incorporating Fintech and distributed ledger technologies where feasible to provide additional value to stakeholders. I'm currently researching ways in which AI can enhance both due diligence and entitlement for commercial real estate professionals.
Contact Me Below
If you are interested in a free, no risk project assessment, send me the form below and I'll send you my Proforma Wish List to get you started on developing a proforma that you can literally take to the bank.
I won't put you on a mailing list for future offers. I won't text you with daily specials and I won't sell or give your information to any third party without your request and/or consent.