he BUILD Funds are commingled real estate funds that provide financing for to-be-built and selective rehabilitation real estate projects. The investors in the BUILD Funds are various Taft-Hartley pension funds (Building Trade Pension Funds).

The BUILD Funds provide primarily equity financing, occasionally providing debt and mezzanine debt, all at market rate terms.

The BUILD Funds finance a wide range of institutional quality real estate projects, including retail centers, multi-family projects, office buildings, and industrial buildings.

The BUILD Funds offer financial incentives to encourage development partners to refinance BUILD out of the transaction within five to ten years.

The BUILD Funds invest in projects, which are constructed with union labor.

The BUILD Funds are looking to invest in local projects with total costs ranging from $5,000,000 to $25,000,000.

Equity Financing
The BUILD Fund typically provides most of the equity financing required for a real estate project. (Usually about 25% of Total Project Cost.) A special purpose Limited Liability Company would be created as the investment vehicle to build, own, and manage the project. BUILD would invest in that new LLC and, typically, ownership would be 50/50 between the developer and BUILD. The developer would be the Managing Member of the LLC. BUILD would receive a preferred return on its equity that would range from 8% to 12% (depending on the risk of the project). BUILD and the developer would then share the free (after debt service and preferred returns) cash flow 50/50, with BUILD’s share of free cash flow being applied as a return of its invested capital. If the developer contributes equity, its cash flow distribution would also be treated as a return of invested capital. BUILD’s capital is non-recourse to the developer.

Mezzanine Debt Financing
The BUILD Fund has the ability to selectively provide Mezzanine Debt financing for real estate projects. The terms and conditions for Mezzanine Debt financing are market rate. The Mezzanine Debt is non-recourse to the Developer. BUILD takes a pledge of the ownership interest of the Developer.