The Clayton Modular Equity Program (CME Program)
The CME Program offers our clients an equity investment in there project to help achieve requisite debt/equity ratios for new construction to senior debt financing, this with selected clients who build with our modular construction products, while utilizing our services in completing such project therein. Our equity investment is applied in concert with a qualified Completion Bond or Performance Guarantee which helps reduce the effective overall cost of capital, while lowering the overall financial risk of the project for all involved.
On approved projects, IAS and Clayton provides an equity investment of between 10-20% of the overall total project completion costs as a subordinated total of our contract to provide modular construction and services for the project. Our combined offering to the client is targeted to either match and or be relatively close to the overall completion costs originally assumed and provided to us by the client for our initial consideration to invest. Our equity investment can also be provided combined with the services of a selected Construction Partner of IAS and Clayton, with this Construction Partner delivering to the client a Lump-Sum or GMP Contract for the overall completion of both the site work and non-modular construction applications. On certain asset types, we will subordinate this total project cost or investment for up to three to five years from the date of the Certificate of Occupancy.
On approved projects, we can also provide our investment as cash equity at the time of the construction loan closing. In either case, the structure of our equity investment is based on the lender’s requirements in approving the client for the successful closing of the loan.
CME Program Relationship Structure Offered
IAS and Clayton will do an initial review of your project considering our combined services and Program along with the following target goals for you as the client. IAS and Clayton makes a profit outside of our CME Program fee, which is included within our total modular cost offered to the project. Additionally we may include outside services as needed or requested, and present our clients a price that is appropiate based on the value of our CME Program.
- To attempt to match or improve your overall development budget combined with our modular construction application, CME fees, and all non-modular costs outside of IAS and Clayton’s scope of work and become your modular construction partner.
- IAS and Clayton charges a fee of between 3-5% of the project’s total development costs, which is included within our total offering of services combined with our Program. We will earn profits and return requirments within such fees, along with the profits that we earn on the modular portions as it relates.
- Be involved in successful projects with our clients in a program of work as a team, while placing good business practices in the market place to create long-term partnerships.
