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Due Diligence Documentation "Exhibit D-5"
Developer’s Project Marketing &
Advertising Plan
The following notes
are provided pertaining to this exhibit:
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What: most
real estate development projects envision some form of pre-sales.
These pre-sales may take the form of fee-simple housing units, commercial
property leasing, rental residential property leasing or entry-fee sales (in
the case of some types of senior housing). These pre-sales typically
commence with the pre-construction phase and continue over the course of the
development. Accordingly, the Developer is the responsible party for
ensuring that a project marketing and advertising plan has been contrived so
that a reasonable person would conclude that the proposed Project's
marketing plan has the necessary attributes, funding resources, personnel
resources and management oversight necessary to succeed in an open
market.
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When: the
project marketing and advertising plan is typically completed in concert
with the creation of the pro forma financial presentation (see Exhibit
F-5).
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Why: in many
cases, a project's construction mortgage financing will not close and fund
until a certain level of pre-sales has been attained as evidence of
sufficient market demand existing for the benefit of the construction
mortgage lender. Accordingly, it is important to consider the
marketing and advertising plan on the basis of qualitative and quantitative
measures.
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Where: the
marketing and advertising plan is created at the pre-construction phase and
updated and reforecasted as needed.
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How: electronic
file format.
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What's important: the
marketing and advertising plan should provide personnel and resources that
are appropriate to the scope and size of the pre-sales effort the
construction mortgage lender is likely to require.
For more information, please contact us at 832.659.5009 or via email at info@realestateplays.com.
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