Envoy to Provide 100 Percent Financing for Ground-Lease Developments

by Scott Reid

Chicago — Envoy Net Lease Partners LLC has created a new lending program that provides up to 100 percent loan-to-cost financing for developers, retail and restaurant companies involved in ground lease developments, up to $4 million per property.

Envoy is the first lender to offer 100 percent financing of ground-lease development transactions. These transactions involve the acquisition and preparation of raw land to be leased long-term to a tenant company, which will construct its own building upon the site.

Traditional lenders such as banks typically finance up to just 80 percent of the cost, forcing developers to seek an equity partner for the remaining funds — a route that adds substantial costs while taking away control.

With the addition of the ground-lease program, Envoy now offers developers four financing options for single-tenant, net lease properties: ground-lease loans (up to 100 percent LTC financing); construction loans (up to 95 percent LTC); bridge loans (up to 90 percent loan-to-purchase price for properties in transition); and JV equity (up to 95 percent equity financing for build-to-suit net lease transactions). 

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