Developers Page

Equity Capital: Mokhus and capital partners can invest equity to help launch or restart a development project, beginning with land acquisition. Our capital is invested in a joint venture or other structure, specially tailored for each project to suit the needs of our investors and operating partners. If a project does not fall within the framework of the deal criteria of Mokhus or its partners, we may still help fund the project by making an introduction to an interested equity party.

Debt Financing: Mokhus can take the lead in assembling the debt package when it is a principal investor or investors rep or is working as advisor to a developer on a project. Mokhus, as an equity investor and advisor, is not itself a lending institution, but the firm has hundreds of relationships with lenders, wall street firms, regional banks and specialty debt shops, and we continue to form new relationships. Changes in the economy always leads to new financing programs coming to market, and Mokhus is up to date on the newest capital solutions for our investors and affiliates to get the most out of our deals. Mokhus’ track record demonstrates that we bring the most competitive debt package available to fund development projects and create the best capital structure to maximize return on equity investment and mitigate financial risk.

Financial and Strategic: Mokhus assists development partners on a variety of issues, either as an investor or outside consultant. Examples of this work includes acquisition and disposition strategy, highest and best use analysis, asset management strategy, valuation of assets, management issues, marketing strategy, recapitalization, negotiations with partners and lenders and owners, restructuring, reorganization (Chapter 11) and exit strategy.

Deal Sourcing: Deal Sourcing: Mokhus is known for having a regular flow of interesting and profitable deals across the U.S. and overseas. Our projects are not widely marketed; we most often work directly with principals rather than third parties, as we like to assemble information on deals first hand. Our deal sourcing comes through the strong relationships we have built with funds, lenders, owners, operators and professional firms across the country who contact Mokhus when they have a project or situation which require a resolution through acquisition and development of an asset. The best deals done by Mokhus are those that we have created in-house, by assessing a situation or property and creating a strategy to enhance its value as an investment. We bring deals to developers to build in joint venture with us, as we often require a strong operating partner to unlock the value we have identified in our acquisition analysis.

Sponsor Enhancement: Mokhus will sometimes bring in new managers or a new group or to strengthen, a developer or operating team. We can be asked by new owners to assess the current situation and management needs. Developers approach us themselves to help cover an aspect of a project that is outside the core strengths of the main developer, such as adding a retail operator to handle a separate piece of an apartment development being planned, or to identify a strong sponsor for a project which is has stalled or is changing hands. Sponsor enhancement often occurs in concert with an investment transaction or acquisition by Mokhus.

Special Partners: Mokhus grants special status to a select number of development and operating groups as Mokhus Selected Partners These partners get right of first refusal as developers for our new deals, can invest in other Mokhus off-market transactions and have the opportunity to participate in our consulting and advisory projects when specific development expertise is required. When Mokhus raises capital from investors for our projects or investment fund, we package the best deals in the pipeline of our Special Partners (limited to one per asset class) into an investor presentation to showcase their abilities as developers and operators. Their developement capabilities, track record, history with Mokhus and busines plan are all reviewed. The intended result is that projects of our Special Partners are funded first, with the best possible deal structures for developers, providing them with the highest available profit splits and carried interest.

Case Study One: Mokhus is asked by a developer acquiring land to build a 330 acre, $500 million dollar mixed use development, to help with the land acquisition before the developers purchase option expires. Previous attempts to access capital by the developer were not successful, as the project had a tax division issue with another property, and litigation was feared. Mokhus interfaces with the seller, and gains extra time for closing by funding a soft and then hard deposit of $1 Million. Mokhus then works out a deal with the other property owner, by getting both parties to agree to handle entitlement issues under a single plan, each party donating 5 acres for common open space and a shared amenity. Mokhus then meets again with the Seller, and seller agrees for $5 Million of the purchase price to be paid to him at the start of construction, and $2 Million is structured as a preferred equity investment into the project, reducing the immediate cash requirements. Mokhus then brings in an equity partner who provides $12 Million, and a lender who gives a commitment for a $10 Million acquisition loan. The excess $2 Million funds working capital for entitlements.

Case Study Two: The City requires that a hotel be built on the property for the developer to receive the tax incentives from the city, which are required for the deal to achieve its target returns. This developer who is focused on luxury residential development, has no background in hotel development. The Mokhus analysis and marketing team works with the developer to perfect his presentation, and rework his land plan and numbers so that the proper footprint and incentives can be provided for a hotel flag Mokhus has identified. Mokhus brings a hotel developer to the project, who agrees to put up 10% of the equity capital as incentive for having exclusive rights to develop the hotel portion and also have first right of refusal on another project in a different city. Mokhus and capital partners invest 45% of the required equity, and also bring in an acquisition bridge loan with a new group for another 40%. The developer, as sponsor, funds only 5% of the equity and is able to make the purchase and proceed with entitlements and maintain sponsorship rights and ownership.

Mokhus approaches its work with developers according to the firm’s criteria for asset types‚ transaction sizes and regions of focus. We seek to partner with the best sponsors in our target regions; our development partners have first rate teams, a solid business plan, demonstrated ability to see projects to completion, and sheer determination to succeed in spite of challenges. Small to mid-size groups wanting to rise to the next level tend to do very well with Mokhus. Our partners should respect the Mokhus Philosophy in their work with us. Mokhus chooses to work with people that we enjoy- we thrive on our work and want it to be fun in the end. Life is too short to work with less than the best.