Our land development company owns several parcels of land across Southern California, we are in the process of raising capital (per project) to entitle the land, grade and sell to merchant builders.
Our company also manages a very large portfolio of land for an individual, consisting of over 1000 acres of land in Southern California, some very prime commercial/industrial along the freeway.
Recently the individual has decided to sell a significant portion of this portfolio.
What I am looking for is if there is creative way of raising sufficient capital (institutional?)...where instead of selling our clients portfolio properties individually and separately raising capital for all our projects, there was a process where we could put all the properties into one pool (or entity) and raise funds for everything.
This would increase the overall raise amount, address our challenges of raising capital per project and the returns would be shares of all the projects.
I hope I've explained my idea in a manner where someone with the experience can chime in.
Thanks in advance.
You have raised a compelling reason for why it would benefit you and your company to raise this institutional fund, but you haven't explained why it would be attractive for the institutional investor. While it makes sense to raise one fund to fund the various projects that can be developed from your client's land assets, how would funding all of these projects together benefit the investor? Is your client willing to sell the portfolio of assets at a discount? Is he willing to seller finance the land and subordinate to other lenders? Is he willing to JV on the deal? Is there a compelling reason you or your firm should spearhead this effort?
I believe there needs to be an attractive rationale for the investor to invest in a pool of investments rather than a specific investment. While the pool may be easier for the sponsor, I'm not sure it necessarily makes sense from the investor's perspective.