CRIC2 Funds allows companies to convert existing fixed real estate assets into cash at fair market value. CRIC2 Funds can also fund new real estate acquisitions and construction, including the cost of the land acquisitions, so companies never have to tie up capital or credit in land or buildings.
CRIC2 Funds provides 100% financing of real estate (vs. conventional mortgage financing of 70-75% loan-to-value)—the lowest cost alternative for the use of companies’ commercial real estate.
CRIC2 Funds’ transactions are not bound by formalized loan industry or REIT requirements, giving the company flexibility to meet its clients’ needs. Rents can be fixed for the full lease term without any percentage rent with extended renewal terms. Rents can also be stepped to be lower in the early years or reset periodically to take advantage of improved credit, interest rates and other conditions. CRIC2 Funds can also address unexpected financial and business contingencies. With its capital solutions, clients are never saddled with any restrictive covenants and can lock in favorable rates for longer terms than traditional debt.
CRIC2 Funds’ customized net leases allow companies to retain complete operational control of their properties for as long as it is required in their businesses.
Low After-Tax Cost
The rent is fully deductible over the lease term, making the after-tax cost to the corporate lessee less than with alternative forms of asset-based financing and less than the market rent it would typically pay.
For federal income tax purposes, a company can only depreciate buildings and other physical improvements, but not land. CRIC2 Funds’ capital solutions factor the value of the land into the rent. Since the rent is fully deductible, clients are effectively able to depreciate the cost of the land.