Tuesday, October 14, 2008
5:30 pm - 7:30 pm

This course explores the real estate capital market products that are subordinate to the first mortgage lender. The course is divided into two primary components:

Mezzanine Financing and B-notes:

This section focuses on the portion of the capital stack that is subordinate to the senior lender. This section reviews the structure and investment criteria of mezzanine loans, B notes and second trusts. This section explores how mezzanine debt is structured, priced and the relationship between the sponsor and the first trust lender. This section provides a good working knowledge of the risks and rewards of mezzanine finance.

Equity: Preferred Equity and Joint Venture Equity:

This section explores equity investments in real estate assets. The presentation is from both the provider of equity (investor) and the user of the equity (sponsor) point of view. This section provides an in depth review of how real estate joint ventures are structured and how different structures can provide different risk and return profiles for the investor. This is a "hands on" and pragmatic review on how real estate equity investors make and lose money, with an emphasis on how to distinguish good deals from bad deals.

Course Contents:

1. Mezzanine Debt Overview
   • The Intercreditor Agreement
   • The Multi-Tiered, Structural Capital Stack
   • Mezzanine Loans & the First Trust Lender
   • Structuring Around the Senior Debt
   • The Mezzanine Loan Risk/Reward Continuum
   • Exit Strategies: Refinance & Sale
   • Getting the Mezzanine Loan Deal Done
2. A Note/B Note Structure Compared to First Trust/Mezzanine Loan Structures
3. Preferred Equity Basics
4. Joint Venture Equity Overview
   • Sponsor Equity: All Equity is Not Created Equal
   • Joint Venture Equity: Profit Participation Overview
   • Joint Venture Equity: Profit Participation Structures
5. Equity Investments Analysis: Good Deals vs. Bad Deals
6. Comparing Mezzanine Financing & Equity Financing
7. Opportunistic Funds vs. Joint Venture Transactions
8. Transaction Structuring Tools, Tricks & Traps
9. Glossary of Terms
10. Conclusion/Summary

Workshop leader:

Jay Rollins, President, JCR Capital

Mr. Rollins is President and co-founder of JCR Capital, LLC (Johnson Capital/Rollins).  JCR Capital is a specialty real estate finance company, specializing in providing structured debt and equity capital for value added and opportunistic and value added commercial real estate transactions. 

Prior to forming JCR in May 2006, Mr. Rollins was a Managing Director of GMACCM’s Structured Products Group.  In this role Mr. Rollins managed a $500 million balance sheet position that focused on originating bridge loans, mezzanine loans, and participating debt.  The platform focused on opportunistic real estate transactions, in particular,  multifamily, retail, office, industrial, land and affordable housing asset classes.

Mr. Rollins started the Structured Products Group (SPG) in 1999, and over that time originated and was repaid on over $1.1 billion of high yield loans, achieving an unleveraged IRR of 9.7%.  SPG was recognized nationally by numerous industry periodicals including Mezzanine Lender of the Year honors.

Prior to GMACCM, Mr. Rollins was the President and Founder of Eastern Realty Corporation, a real estate investment and advisory company.  Eastern Realty purchased over $400 million of distressed (primary, land and commercial) assets from the RTC and other distressed financial institutions.  The assets were repositioned and resold by Eastern Realty.  These repositioning efforts included debt restructuring, land development and construction.  Eastern Realty was a joint venture partner with Wall Street investment banks, real estate opportunity fund and private equity firms.

Prior to forming Eastern Realty, Mr. Rollins was Director of Finance for the public homebuilder, NVR, LP.  In this position Mr. Rollins was responsible for capital relationships and structuring debt and equity for land development and construction projects.

Mr. Rollins began his career as a commercial real estate lender with regional banks in the Washington, DC area.  Mr. Rollins holds an MBA in Finance from George Washington University and an undergraduate degree in Finance and Marketing from Virginia Tech.