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Overview: Gates Group Capital Partners through its Parking Real Estate Fund II, LP will enter into lease-leaseback transactions with universities, hospitals and governmental entities (“Institutional Owners”) for their income producing assets such as parking, publicly-owned utilities, student housing, etc. Our approach is one of developing a financing strategy whereby institutional owners can monetize the asset and redeploy the capital while preserving bond/debt capacity for activities that directly support their core mission.
Our highly flexible, low-friction acquisition/asset management approach provides Institutional Owners of assets creative financial solutions in meeting on-going capital and budgetary needs. Our clients can continue to provide the end user with traditional parking services while at the same time preserving capital resources for mission critical priorities.
Investment Profile: The Fund will invest in existing and proposed cash flowing assets with values of $5 million to $300 million located in select U.S. and Canadian markets with the following ownership profiles:
- Public authorities, such as states, counties and local governments
- Colleges and universities
- Hospitals and other healthcare institutions
Advantages: Gates provides customized financing solutions for institutions that do not wish to use direct debt to finance fixed assets. This monetization of assets permits the Institution Owners to:
- Preserve debt capacity and borrowing power
- Raise capital faster and less expensively than through a bond issue
- Realize more balance sheet flexibility
- Direct capital to mission critical projects and needs
Control: Gates structures the investment so that the Institutional Owner retains the ability to control the strategic direction of its assets. This seamless transaction allows the institution to:
- Manage the daily operations, personnel and rate structure
- Gain potential upside through real growth and rate increases
- Take back the asset when needed for higher and better use
Flexibility: Gates typically will lease/leaseback the asset for 15 to 30 years. At the end of the lease term the Institutional Owner can extinguish the lease for a $1.00. In addition, off-balance sheet treatment is achievable through the conveyance of the assets to a conduit 501(c)3 entity formed exclusively to own and manage the assets on behalf of the Institutional Owner.
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