Mark Len, like many property owners, has watched with dismay as potentially attractive tenants are unable to get bank financing to launch or expand businesses.
So Len decided to become a banker himself.
Gathering together a group of private investors looking for someplace to put their money that pays more than bank certificates of deposit, Len is offering to bankroll credit-worthy potential tenants.
Len's company, City Developers Corp., owns the 42,000-square-foot Smithridge Business Center, a flex project in the Meadowood area, and about 70,000 square feet of office space on Roberta Lane near the corner of Pyramid Way and North McCarran Boulevard in Sparks.
Neither of the projects suffers from particularly high vacancy. They're about 10 percent vacant, half the average across the Reno-Sparks market.
But even so, Sacramento-based City Developers wants to fill vacant locations, and Len says the lack of available financing from banks consistently presents an obstacle.
The financing program that City Developers has created is available for working capital, equipment purchases or other business needs.
Terms, Len says, will depend on the amount of space that a potential tenant agrees to lease as well as the terms of the lease itself.
And City Developers and the investor group it's gathered will be carefully weighing the creditworthiness of potential borrowers.
Still, Len says that investors aren't spooked by risk especially after they've seen returns of two percent on the money they've parked in CDs.
"These guys are very anxious to put their money to work," he says.
City Developers just launched the financing program, and Len says it's too early to tell how well it will work.
Brian Armon of Trinity, a Reno commercial real estate firm that leases the City Developers projects, says he's not aware of any similar financing program by other property owners.
"We're trying to open as many doors as we can," Armon says.
