How Colonial Capital Empowered this Phoenix Commercial Developer to Build an Acclaimed Retail Property on Time

Chris Walton is a commercial developer based in Arizona. He buys properties in and around Arizona and revamps them to meet the requirements of retail stores. He has 6 retail complexes in Arizona that yield him a significant amount of monthly revenue. 

When Chris Walton learned that Raising Cane’s was planning to open a new store in Chandler, Arizona, he knew just the perfect property he could modify. A 1.22-Acre (53,143 square foot) plot close to the highway that can draw significant walk-ins. However, there was one issue. If he were to take up the project, he would need an extra $768,000. And he needed it fast. There was a long list of developers in the city who could take up the project. With Chris’s expertise and experience in the industry, he was one of the most capable people in the line, but the capital shortage could lose him business. 

Chris was unsure if banks would lend him such a huge amount of money in the stipulated time. That was what brought him to Colonial Capital. As commercial hard money lenders, we assessed his situation and offered a viable solution.

He Needed to Redefine Retail Store Requirements According to Changing Shopping Patterns  

If you have ever drooled over a burger that popped into your Instagram feed, you would know how our shopping patterns have completely transformed over the last few years. Despite having an office cafeteria on the ground floor or a restaurant just across the street, you’d order the luscious burger on social media that kindled your hunger pangs. That is how shopping has evolved in the digital era. 

To be sustainable in this environment, retail stores are forced to keep pace with trends. They have to accommodate customers from all sectors and this means physical stores have to be redesigned. For example, with the rising popularity of food delivery, dining in is declining. Most people prefer to order food and eat it in the comfort of their homes. Also, drive-in restaurants have gained momentum, especially in the post-COVID era. 

For this reason, emerging retail shops need restructuring. Large dining areas are a waste of space, especially for fast food ventures. Retail commercial developers like Chris lose clients as a result. If they want to sell their properties, they have to restructure them and that costs a lot of money. When they sign up on a new project, they have to accommodate the new requirements into the design. 

He Could Incur Cost Overruns if the Project were Delayed 

Even if Chris forwarded the advanced payment to the landlord and locked the deal, it wouldn’t be wise to go ahead with it until he sourced the capital. If he failed to procure money on time, it would lead to cost overruns. 

Most overruns arise due to factors like inflation and fluctuations in the prices of construction materials. When a project is delayed, the rent that needs to be paid on the equipment will still mount up in the background with no productivity. Also, commercial developers usually hire construction workers based on a monthly contract depending on the size of the project. However, if the builder runs short of money during the project development, it will disturb the schedule, and workers will have to be sent away with compensation. Unforeseen expenses like this add to the total cost. 

He Needed Immediate Support From Commercial Hard Money Lenders

The retail commercial construction sector is highly competitive, especially in emerging markets like Arizona that are witnessing a new influx of people. Developers are vying to procure ideal plots in city perimeters and suburbs with significant traffic. Keeping a close watch on the market, they lease land and prepare the site for sale to retail shops.

When it comes to retail branches and franchisees, the appeal increases as they mostly have a solid financial background and sustainable business plan. They have a uniform construction plan across different stores with mild modifications according to changing market and geographical conditions. This essentially means the project will progress with little to no designing glitches and changes, saving time and cost for the developer. 

Cash When You Need It 

Colonial went over Chris Walton’s financial background in detail to understand if he would be able to complete the project as planned and repay his loan on time. He has been in the construction business for over 25 years now. This is not his first time undertaking a franchisee project. He knows the specific requirements of the industry. Also, he has taken his time to study the shifting requirements of the sector, especially those owing to the emergence of food delivery apps and drive-in restaurants. Although the new project caters to new-age customers mostly, it still has to set aside some room for dining in. His business plan efficiently addresses the tenant’s requirements.

The 1.22-acre (53,143 square foot) property he found in Chandler, Arizona fits the requirements perfectly. The plot will accommodate the store on one side and customers will have adequate space to park their vehicles and even dine from the vehicles if they choose to. 

Raising Cane’s Chicken Fingers is a global fast-food restaurant chain based in the US; we didn’t have to dig deep into their level of competence. However, we did go over their financial statements for the last 5 years to ensure that they will be able to sustain their business in the long run and pay the rent on time. Like Chris, Raising Cane also has good credit. We also looked at their assets as part of the underwriting process. 

At the end of the assessment period, which we were able to complete in 3 days with the proactive approach Chris took, we came to the conclusion that Chris Walton would be a valuable client for Colonial. We gave him a custom $768,000 loan at 10.75% quarterly compounded interest which was to be closed in 18 months. With the required capital in hand, Chris leased out the plot of land and signed the deal with Raising Cane’s to get started on the project. 

In around 6 month’s time, the project was completed as per the tenant’s requirements and they opened for business. Chris closed his loan account in 18 months and is now a recurring client of Colonial.

Arizona’s Premier Private Lender 

If you are exploring real estate opportunities in Arizona and are having a hard time finding capital to embark on projects, look no further. Colonial Capital is a privately held lending firm specialized in providing asset-backed short-term bridge financing.

As a premier financial institution that helps small and medium businesses, we are always ready to help individuals get back to doing what they do best. And with us by their side, their success is guaranteed. 

Call us today to get your case assessed and get a loan to help you take the next step in your business. 

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