Intercap Institutional Investors is an emerging national leader in the planning, development, financing and operation of university linked retirement centers, hotel/conference centers and other special-purpose, campus-based real estate development projects.
Intercap partners with important market participants in both the lodging and the retirement sectors and acts as a risk-taking developer driving the planning, financing, building and operation of university real estate. Intercap shares equally in project risk with its development partners, uses its own funds to get projects to closing on institutional debt and equity, has entered into contractual equity funding commitments of over $150 million with major institutional equity partners and has developed project-specific construction loan relationships sufficient to fund debt to equity ratios of 65/35.
Intercap projects are currently in advanced stages of development at Louisiana State University in Baton Rouge, LA and New Mexico State University in Las Cruces, NM. Intercap has other projects in earlier stages of consideration and would be pleased to respond to inquiries from university administrators as well as formal Requests for Proposal.
Intercap Background
Intercap Institutional Investors LLC (www.intercapinvestors.com) was formed in 2005 by David Weaver and Greg Eden to develop and finance a national platform of real estate projects on or near college and university campuses. Together, Mr. Weaver’s and Mr. Eden’s careers total nearly sixty years of involvement with colleges and universities on projects ranging from equipment finance to medical facilities, retirement communities and student housing.
For the past three years, Intercap has focused on developing university-related hotel/conference centers and university-linked active retirement communities (“ULARC’s”).
Intercap's hotel projects capitalize on the significant branding and marketing opportunities associated with lodging on or near university campuses--especially those with hospitality related programs and schools.
Intercap's retirement projects are strongly supported by the demographics of the baby boomer generation, as 33 million retirement-age residents of the United States are soon to see their ranks swell to 70 million with the influx of the baby boomer generation.
The Company’s business model includes the financing, development and/or purchase of “for-profit” and “not-for-profit” projects, as well as their operation when appropriate. In these projects, Intercap works closely with a university sponsor (either the institution itself or a related foundation or association) to select the appropriate site, the type of working relationship best suited to the institution, the role of the university foundation and/or the alumni association and the development and operating model Intercap deems most likely to succeed.
Intercap’s History
Intercap began its operations in early 2005 to help universities finance their educational, medical, research, infrastructure and administrative real estate needs. The firm began by structuring innovative project financing to help universities take real estate needs off their wish lists and convert them to bricks and mortar. Partnering with institutional administrators, Intercap’s funding solutions combined traditional higher education financing approaches with proven public/private and for-profit development funding techniques.
As Intercap became more involved in university project financing, its principals realized that many projects that could have gone forward were failing to do so because nobody appeared willing to take risk. The universities were, themselves, traditionally risk-averse… and commercially-savvy risk-taking developers were nowhere to be found. The only available developers were for-hire, fee-based and unwilling to put their own money (or even time) at risk. Similarly, architects, engineers, contractors and operators all wanted fees, but the hard-driving, entrepreneurial, risk-taking initial funding source was missing.
Intercap’s principals realized that they could fill an important need by going back to their commercial developer roots and again start thinking like developers, not investment bankers. Among the initial projects Intercap analyzed, two important areas of opportunity became apparent: university-linked hotels and alumni-focused active retirement centers. Based on analysis of institutional needs and national demographics, Intercap began to focus on building these products as consistently designed, developed, funded and operated facilities.
Intercap’s Development Philosophy
Intercap’s approach to project development combines dedication to our partners, a belief in higher education and a sincere commitment to a sustainable future. We are prepared to listen, to perform intensive due diligence and to challenge ourselves to think beyond traditional institutional funding, development and operational mechanics. The results are flexible, innovative structures that succeed in delivering completed real estate projects that might otherwise be delayed or never built.
We bring extensive, multi-disciplinary professional experience to resolving institutional real estate funding challenges. Our backgrounds include:
- legal and financial expertise in taxable and tax-exempt bond financing,
- public/private partnerships,
- sustainable project development,
- integrated turn-key design and construction,
- project management and
- energy efficient building management.
Together, our cross-disciplinary backgrounds give us the experience to consider all aspects of project development and the ability to integrate comprehensive financial structures with appropriately-funded, quality-built and operated real estate projects.
Based on our extensive experience in higher education, Intercap’s principals recognize the need to keep project costs in bound. Intercap always looks to minimize project impact on the institution’s balance sheet, credit ratings and bond caps. We team with qualified planners, lawyers, accountants, architects, engineers, contractors, and facilities managers who understand and can deliver the sustainable criteria, specifications, and operating results necessary to support our proposed financing structures. Our coordinated approach with design, engineering, construction, and operating elements is focused on achieving cost-effective, environmentally-sensitive facilities.
We think and act like the private developers that we are. We commit our own monies and we take responsibility for providing a full service continuum of institutional project development, financing and operation. Our approach produces completed institutional real estate projects efficiently and cost-effectively. It avoids delays, confusion and finger-pointing by clearly defining and apportioning risk, responsibility and return between institutions and third-party participants in the development process. Business Model
Intercap is currently working on the following major projects:
- Louisiana State University (ULARC)
- New Mexico State University (Hotel)
In each of the above cases, Intercap has been selected by the University and/or the University’s Alumni Association (or affiliate) and has entered into a formal agreement to be the exclusive developer and operator of the project.
Prior to entering into any formal relationship with a university, Intercap investigates the demographic suitability of the project using independent third-party professional firms, and performs preliminary market due-diligence regarding interest in and demand for the subject facilities. Once Intercap determines that it is interested in proceeding with a project and it concludes that the project may be capable of meeting the above criteria, it meets with university administration to discuss the level of interest in working together to develop the project.
With a positive feasibility analysis in hand, Intercap then brings in architects, construction associates and skilled, nationally-recognized operators on a preliminary basis to discuss site and conceptual design issues, as well as construction, operating and other project costs. Intercap concurrently performs a series of detailed dynamic financial analyses as data becomes available to determine the appropriate configuration and pricing levels for the proposed project.
Once financial feasibility has been determined, Intercap prepares an investment offering summary; approaches its equity financing sources and begins the process of investigating and determining the availability and pricing of construction funding. Once funding is in place, Intercap acts as the at-risk project developer. Then, once the project is completed (and when appropriate), Intercap or one of its affiliates will act as the facility operator.
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