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GenX Capital Partners, a Miami-based real estate debt and equity advisory firm, has secured $24 million in construction financing to complete The Mark, a 45-unit, high-end condominium that managing partner Mark McClure hopes will serve the growing seasonal rental market in Portland, Maine.
Washington-based Builders Capital provided the $24 million in senior mezzanine construction financing, which has a 24-month term. The mezzanine debt is secured against C-PACE funding approved by the State of Maine on Sept. 18. C-PACE — which stands for Commercial Property Assessed Clean Energy — is a federally operated financing program that allows developers or building owners to access favorable financing terms from states so long as they utilize green energy and renewable energy features in their buildings.
McClure told Commercial Observer that GenX Capital Partners used its own equity and worked with bridge lender Titan Funding in Boca Raton, Fla., to build the first 40 percent of the project using $9.5 million of initial financing.
“We started 14 months ago, and self-funded it as we went for C-PACE approval,” explained McClure. “We’ll be the first C-PACE commercial deal in Maine ever.”
McClure added that the use of C-PACE funding will allow his firm to borrow more money against the cost of the project, and, hopefully, enhance their profit.
“It was good, low-interest financing. On this deal we got 65 percent loan-to-cost with Builders Capital, but bringing us into C-PACE brought us to 90 percent,” he said. “It’s a great way to add leverage to your deal.”
Located in Cumberland Foreside, a wealthy seaside ZIP code about 20 minutes north of Portland, The Mark will feature one-, two- and three-bedroom high-end condo units. The five-story building will include an underground parking garage with more than 90 spaces and a fitness center built by a firm owned by former New England Patriot Rob Gronkowski.
Moreover, The Mark is expected to offer more than just a home to buyers. McClure noted that his main focus is attracting buyers who will be keen to use the property during the summer months and rent out their units during the other seasons.
“We’ll sell the units as condos, but Maine is such a huge vacation site that there will be a great place for second and third homebuyers to use it in the summertime and rent out in the winter to make money,” he said. “That will be our target market to buy and utilize our short-term rental platform.”
Earlier this year, GenX Capital Partners launched Chill Villas, a short-term rental brand that caters toward luxury properties. The firm acquired a pair of luxury villas in Miami Beach in January to begin their platform.
McClure said that the project’s one-bedroom units could generate $40,000 in net operating income (NOI) and two-bedroom units could generate up to $50,000 in NOI, which could turn into more than 10 percent cash-on-cash returns for the buyer of an individual unit.
The Cumberland Foreside area “doesn’t have stringent requirements on short-term rentals,” he said.
Founded in 2016, GenX Capital Partners specializes in CRE investment in debt and equity partnerships. While The Mark is McClure’s first development, in recent years his firm has closed equity financing for a Chicago multifamily development and refinanced a beach club in Newport, Rhode Island.
Brian Pascus can be reached at bpascus@commercialobserver.com
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