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ABOUT US

STRATEGIC ALLIANCE

CAPITAL SPOTLIGHT

TRANSACTION EXPERIENCE

CAPITAL MARKETSABOUT US

A B O U T U S

303 CONGRESS STREET | BOSTON, MA 02210 | 617.457.3400 | HUNNEMANRE.COM

Hunneman is a boutique capital markets group that is exceptionally client centric and well-versed in all aspects of capital formation, construction/development, and joint ventures. We are singularly focused on representing our client’s interests with a high-touch, transparent process that is driven by adding value to every assignment. With Hunneman, your firm receives a highly experienced finance department that will service all of your real estate capital requirements.

Hunneman will provide your firm with customized service that is expert in raising capital and delivering certainty of execution. Our process has been refined over the past twenty years to create an efficient process that maximizes the results for our clients.

Hunneman purposefully does not act as a correspondent agent for any capital providers in order to maintain its neutrality with respect to where a financing is placed. Consequently, we do not steer business to correspondent relationships in order to meet annual origination goals. Instead, we represent you, our client, with our only objective to secure the best possible financing solution at the lowest cost of capital.

Our transactions generally range from $2,000,000 to $50,000,000 and cover nearly every income producing property type in the market. Our deep background in underwriting complex transactions has resulted in us completing several large joint venture structures on projects in excess of $50 million dollars and many ground-up development and extensive renovation projects in the $15 to $30 million-dollar range. We use the experience that we gain from every transaction to continuously improve our process and provide trusted advice to our clients.

In addition to our background in structuring joint ventures, construction and providing advisory services, Hunneman is very adapt in structuring capital for acquisitions, value-add opportunistic investments, and permanent loan facilities.

While our primary business is serving the Greater Boston market, we follow clients into Connecticut, New Hampshire, Maine, Rhode Island, and Vermont. Outside of New England, we have raised capital for projects across the country and can access our national network of RECA affiliated firms to tap into local sources of funding for your project.

Give us a call and let us show you how working with Hunneman can boost your bottom line. We look forward to earning your business and working with you.

Andrew KaeyerExecutive Vice President(617) [email protected]

A B O U T U S


ADVANTAGES HUNNEMAN PROVIDES:

• We enable you to focus on your core business activities

• Boutique platform provides customized service

• We enable you to expand your existing capital relationships

• Deal structuring assistance

• Proper packaging of the financing for broad based appeal

• Coordinating and distributing diligence materials to capital providers through our secure network

• Assembling and spreadsheeting financing terms for easy comparison

• Leveraging our existing relationships to provide your financing deal priority

• Closing coordination and ensuring timely execution to meet your timelines

• Highly responsive, we return calls the same day

OUR SERVICES:

• High-touch, transparent, value-added execution process

• Comprehensive underwriting of every financing including identifying key issues, potential hurdles and structuring the appropriate mitigant(s)

• A detailed financing prospectus for use with the capital sources and/or investors

• Development modeling, waterfall analyses, and investor return modeling

• Focused marketing effort to structure the most efficient capital stack

• Negotiating financing terms with capital sources and providing a detailed comparison spreadsheet in which to assess the capital providers’ terms

• Coordinating information between the parties, including diligence and third-party reports

• Coordinating the closing of the capital facility

ABOUT US

STRATEGIC ALLIANCE

CAPITAL SPOTLIGHT


CAPITAL MARKETS

STRATEGIC ALLIANCE

S T R AT E G I C A L L I A N C E


Hunneman is a proud member of the Real Estate Capital Alliance (“RECA”) www.reca.us

RECA is an invite-only, collaboration of 20 independently owned capital advisory firms that leverages the collective relationships, experience and daily interactions of our member firms for the benefit of our clients. RECA member firms are located in major real estate markets coast-to-coast and collectively arranged $5.2 Billion of capital in 2018.

Membership affords us and our clients the following benefits:

REAL-TIME MARKET FEEDBACK: Enables Hunneman to constantly track the top lenders nationally and share information across the platform.

DATABASE OF CAPITAL SOURCES: We constantly monitor and update the capital sources that member firms are successfully closing business with.

NATIONAL PRODUCTION NETWORK ENSURES RELIABLE EXECUTION WITH CAPITAL SOURCES: Weekly capital calls and “deal help” provide access to top lenders in the market while also creating awareness of those that re-trade or fall short of expectations. Access to this information enables us to provide certainty of execution and the knowledge that we are placing our clients with the most reputable capital sources.

ANNUAL MEETING OF MEMBER FIRMS: Every year in February, our member firms gather and discuss best practices and market knowledge from across the country. Over a two-day period, we meet privately with over forty capital sources and discuss their lending programs for the upcoming year. We bring this information back to Boston with us so that our clients have the benefit of the latest capital programs.

ABOUT US

STRATEGIC ALLIANCE

CAPITAL SPOTLIGHT


CAPITAL MARKETS

CAPITAL SPOTLIGHT

C A P I TA L S P OT L I G H T


Hunneman arranges many different types of capital depending on each sponsor’s particular needs. We have access to and have closed financings with life insurance companies, banks, credit companies, debt funds, opportunity funds, crowdfunding, CMBS, private lenders and pension funds. In addition to traditional bridge and fixed rate lending, below are some different programs that might be worthy of your consideration.

CROWDFUNDING: Crowdfunding is the latest iteration of group investing to the marketplace. While still in its infancy, crowdfunding is a syndication of investors that is regulated under the Securities and Exchange Commission. Depending on the syndicator, qualified investors can invest as little as $1,000 to $10,000 per transaction. Commercial real estate investments are pre-screened by the crowdfunding platform’s investment committee and then offered out to their pool of investors. Capital raising can take as little as a week, depending on the type of the investment and its location. Crowdfunding investments can take the form of first mortgage financing, mezzanine financing, preferred equity, or equity. Typically, crowdfunding is limited to short-term investments into value-add opportunistic properties. Due to the small size of individual investments, crowdfunding proceeds generally fall in the $500,000 to $6,000,000 size range with a typical limit of $3,000,000. The benefit to a borrower is that crowdfunding can replace capital that historically has been raised through friends and family. Navigating this industry is tricky as there are a number of considerations to think through, including whether or not the provider can fund from its own balance sheet or whether the funding is contingent on them completing the syndication. Hunneman is currently completing a $5,000,000 preferred equity crowdfunding investment and can help you determine if this capital source is a good strategy for your project and which platforms are reputable.

FIX AND FLIP LOANS:

Need short-term money to acquire, renovate, and sell real estate? Hunneman has access to private, non-hard money, lenders that specialize in short-term loans to borrowers. Ranging from as little as $500,000 to $8,000,000, these loans range from six months to three years in term and can be repaid without prepayment fees or minimum interest. They can be used to bridge an acquisition until a bank lender can close or to acquire, renovate and sell a property as apartments, condos, or commercial real estate. Proceeds can be as high as 80% of purchase price and 100% of the improvements to the property thereafter. The proceeds are generally sized based upon a maximum loan-to-stabilized value of not more than 65-70%. The borrower’s FICO score needs to be in excess of 620. Interest rates start as low as 7.00% and can range up to 10.00% (rates may vary based on market conditions). However, for this pricing, total debt proceeds will total 85-90% of the project cost.



HIGH LEVERAGEPARTICIPATING CONSTRUCTIONPERMANENT LOANS:

For larger Class-A multifamily development properties seeking $20,000,000 or more in construction loan proceeds, Hunneman works with national life insurance companies that can provide construction permanent loans or higher leverage, non-recourse participating construction permanent loans. The latter program funds up to 80-85% loan-to-cost (verified land equity may be considered in the cost), so long as the stabilized value is 75% or less. Terms range from 3 to 7 years and the loan is structured and funded like a regular construction loan, where interest is charged as proceeds are drawn. Pricing is based on a total return to the lender, which is structured as a fixed rate coupon in the 5.00% range, which accrues during construction until break-even and the lender shares in the property cash flow and net residual profit. Lenders often require a minimum IRR of 7.00% (calculated at payoff, which is a floor return, not a capped return). Pricing will vary depending on the market and investment profile. This structure works for property investments, where the sponsor anticipates selling the property shortly after stabilization.

HIGHER LEVERAGE, NON-RECOURSE BRIDGE LOANS:

Hunneman works with several non-recourse debt funds that are seeking to lend in the Greater Boston market. Unlike traditional banks that will lend up to 65% loan-to-cost with non-recourse, the debt funds will lend up to 80-85% loan-to-cost on a non-recourse basis. Minimum loan sizes are $5,000,000 and run to over $100,000,000. Pricing varies depending on the asset, location, and investment profile, but start as low as L+200 and range up to L+500. Future funding for capital improvements and leasing costs are provided by the lender and going-in debt yields can be below 1.00X debt service with an interest reserve.

URBAN IN-FILL & SMALL BALANCE MULTIFAMILY:

Hunneman works with several lenders that have a strong appetite for multifamily loans. Depending on the location, loans can range up to $25,000,000 in size and can be closed with low closing costs and pricing in the S+160 range. Loan-to-value for this product is up to 80% (65-70% with cash-out). DSCR can be as low as 1.20X (1.25X for I/O terms up to five years). In certain instances, acquisition loans can be underwritten to 1.15X DSCR. All loans are non-recourse and have no ongoing covenant test.



HUD 223(f) OR 221(d)4:

Hunneman works with national HUD/FHA-insured finance programs. As your trusted advisor, Hunneman can navigate the HUD process and ensure a smooth loan closing process. Typical timeline is 45-60 days to submit the application to HUD, followed by 60-days for HUD to issue a commitment. Closing usually occurs 30-45 days thereafter (total timeline is 4.5-5.5 months). HUD loans work best for properties that are currently owned (no acquisition deadline) and where the owner is seeking to retain ownership for more than ten years. The benefit is a longer amortization schedule of 35+ years and lower going-in debt service coverage ratios (more proceeds).

Advantages of HUD over traditional loan structures include:• Non-recourse and no ongoing covenant tests• We can create custom and creative structures• Flexibility in underwriting considerations• Maximum terms of 35 to 40 years, fully amortizing• Long-term fixed rates• Higher loan-to-value ratios (85-90%, depending on subsidy/

affordability levels)• Lower debt service coverage (1.11X to 1.18X, depending on subsidy/

affordability levels)• Assumable debt

We can also arrange bridge loans up to 90% loan-to-cost (80% loan-to-stabilized value) to cover the gap until the HUD loan closes.

JOINT VENTURE OR SELL:

Hunneman excels at complicated advisory assignments and has assisted clients with assessing whether it makes sense to sell their real estate or pursue a creative disposition approach of entering into a joint venture with a qualified development partner. Hunneman has and will build a custom development model to analyze how a developer will view your asset, so that we can maximize the sale of the asset or model the returns to explore if it makes sense to contribute a portion or all of the asset into a joint venture. Under the latter scenario, the client has the opportunity to ride along-side a sophisticated developer that will invest capital with your investment. Under a joint venture structure, the client has the ability to capture the upside potential of their property. It also mitigates the risk of selling their property too low only to miss out on the upside created through the entitlement and/or development of the property into a higher and best use. Hunneman can walk you through the advantages and disadvantages of joint ventures and whether it is right for you.

ABOUT US

STRATEGIC ALLIANCE

CAPITAL SPOTLIGHT


CAPITAL MARKETS


R E P R E S E N TAT I V E T R A N S A C T I O N E X P E R I E N C E


WALTHAM WATCH FACTORY, WALTHAM, MAOwned by a New York City family office since 1961, Hunneman was approached to identify and structure a joint venture with a Boston development partner to revitalize the 400,000 square foot Waltham Watch Factory. Developed in phases by the Waltham Watch Factory starting in the 1860s, the property consists of twenty-two interconnected buildings on 11.7 acres and holds the distinction of adorning the City of Waltham’s seal. Hunneman procured Berkeley Investments and facilitated a joint venture between the parties. In addition, Hunneman raised the construction financing that enabled the property to be redeveloped into 160 multifamily rental units, 161,000 square feet of office space, and approximately 6,000 square feet of restaurant space.

WATERFRONT SQUARE, REVERE, MAHunneman was retained by Eurovest Development to advise on the redevelopment of an 8.77-acre property along Revere Beach in Revere, Massachusetts. Located at the Wonderland MBTA Blue Line station, the site is permitted for 1,366,700 square feet in nine buildings, including 901 units of multifamily, 42,000 square feet of retail, and a 170-key hotel. As part of the assignment, Hunneman brought in five different developers to build-out the site, which when complete, will total in excess of $500,000,000 in infrastructure and ground up development making it one of the largest TOD projects in Massachusetts.

40 WARREN STREET, CHARLESTOWN, MAHunneman procured the buyer DLJ Real Estate Capital Partners and arranged the construction financing to convert the 40,000 square foot building into a first-class office building in the Charlestown neighborhood of Boston. Originally, the building was designed as a two-story parking garage with a single level of office space above. Once renovated, 40 Warren will provide two-levels of office space above two-floors of parking totaling approximately 51,000 square feet.



TEN ESSEX STREET, CAMBRIDGE, MAHunneman was retained by 3MJ Realty to underwrite the development returns and raise the construction financing to construct this 46-unit ground up development in the heart of Central Square Cambridge.

THE GRAPHIC, CHARLESTOWN, MAHunneman was hired by a private family to assess whether they should sell or contribute their Sullivan Square commercial property towards a joint venture. After extensive analysis of the market and potential returns, Hunneman was hired to arrange a joint venture for the redevelopment of 32 Cambridge Street into 171 multi-family residential units. In addition to identifying and structuring the joint venture with a Boston based developer, Hunneman arranged the construction financing to bring the vision to a realty.

HICHBORN STREET, BRIGHTON, MAHunneman was retained by D2 to raise pre-development financing to acquire the land and obtain the entitlements for this 46-unit condominium development. As a follow-on assignment, Hunneman was hired to raise preferred equity and place the construction loan to finance the ground-up development.

THE HOLMES BUILDING, CAMBRIDGE, MAHunneman was retained by a family trust to arrange 20-year fixed rate permanent financing for this 97-unit multifamily property in the heart of Central Square Cambridge.



THE CONRAD APARTMENTS, BOSTON, MAHunneman arranged construction/permanent financing for the build-out of 27 luxury apartments in Boston’s Downtown Crossing neighborhood. In addition to the upscale residences, the 70,000 square foot property includes 35,300 square feet of retail space along Washington Street. Primary retailers include CVS and Planet Fitness.

HOWLAND DEVELOPMENT INDUSTRIAL PORTFOLIOHunneman was retained to procure long-term fixed rate financing or a six-building industrial portfolio located in the 128-North submarket. The six buildings totaled 380,000 square feet and were located in three North Shore communities.

110 SHAWMUT ROAD, CANTON, MAHunneman was retained by Grander Capital Partners to arrange acquisition financing for this 70,350 square foot flex building in Canton, Massachusetts. The flexible financing facility included additional funding for capital improvements and leasing costs to stabilize the property.

11 CENTENNIAL DRIVE, PEABODY, MAHunneman was retained to arrange ten-year fixed rate financing for a high-bay industrial distribution building in Peabody’s Centennial Park. The building was leased to a single, investment grade tenant with a five-year lease.



306 NEWBURYPORT TURNPIKE, ROWLEY, MAHunneman arranged ten-year fixed rate financing for the acquisition and expansion of this 112,400 square foot, class A, warehouse/distribution building in Rowley, Massachusetts. The loan facility provided funding for a 40,000 square foot addition to the building, which was occupied by a single tenant under a ten-year lease.

NINE CHANNEL CENTER, BOSTON, MAHunneman was retained to arrange financing to accommodate the acquisition and renovation of a former brick and beam industrial building in the popular Channel Center neighborhood. Today the building provides 70,350 square feet of vibrant office and ground floor retail space.

299-301 BALLARDVALE STREET, WILMINGTON, MAHunneman teamed up with Berkeley Investments to acquire this non-performing REO asset from a special servicer. After successfully negotiating the purchase of the three-building, 309,000 square foot portfolio, Hunneman arranged a bridge loan to enable Berkeley Investments to acquire the assets and funds to renovate the buildings and lease vacant space.

NORWOOD GARDENS, NORWOOD, MAHunneman was retained by Chestnut Hill Realty to procure long-term fixed rate financing from a life insurance company. The facility was utilized to refinance the existing mortgage and allow for on-going capital improvements to the 344-unit property.



RIDGECREST VILLAGE, WEST ROXBURY, MAHunneman was retained by Chestnut Hill Realty to procure long-term fixed rate financing from a life insurance company. The facility was utilized to refinance the existing mortgage and allow for ongoing capital improvements to the 401-unit multifamily property.

64 PLEASANT STREET, WATERTOWN, MAHunneman was retained by Sasaki Associates, Inc. to arrange permanent financing for their corporate headquarters building in Watertown, Massachusetts. The facility included funds to complete a renovation of the 98,000 square foot brick and beam building.

173 ENDICOTT STREET, BOSTON, Hunneman was retained to arrange acquisition and construction financing for the ground-up development of this four-unit North End luxury condominium project.

206-214 NEWBURY STREET, BOSTON, MAHunneman was retained, on a consulting basis, to provide an extensive review of this Boston landmark asset by a family trust. The assignment included multiple scenario analyses of different leasing, redevelopment, and sale scenarios to optimize the real estate strategy for the family. In addition to our capital raising expertise, this project is a good example of our ability to quickly analyze a project and provide the tools needed for our clients to make informed decisions.



THE APARTMENTS AT 37 TEMPLE PLACEHunneman arranged acquisition and construction financing to convert this former office building into apartments. After stabilization, Hunneman arranged permanent financing for the 21,000 square foot property.

44 WINTER STREET, BOSTON, MAHunneman was retained to procure acquisition financing for the two-building portfolio and later a construction loan to renovate the upper floors of the property into apartments.

ASHLAND BUSINESS PARK, ASHLAND, MAHunneman was retained by Walker Development to originate acquisition financing for the purchase of 200 Homer Avenue in Ashland, Massachusetts. The property is a 281,000 square foot industrial mill property, which was constructed in phases from 1927 to 1963. As part of the permanent financing facility, Hunneman structured funds to pay for future leasing and capital improvement costs to the building.

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