At the end of June 2023, NLA closed on the acquisition of our 201st project since our founding. These projects represent total costs of $951 million with total equity invested of $223 million. On the 160 projects sold to date, the average return on equity for our investors has been 14.98%.
NLA was formed in 2010, a time when lenders began tightening underwriting requirements for commercial real estate construction financing – requiring more equity and stricter guarantees than many developers were able to provide for the timely development of leased projects. In the first half of 2023, we started to see this scenario repeating, with commercial bank loan underwriting (when even made available) requiring 50% to 100% more equity for new projects. Once again, these requirements are exceeding the capital many developers have access to while many tenants have signed leases on new locations and expect developers to deliver.
NLA is currently providing the financing and construction management of 29 projects on behalf of developers and marketing 12 completed projects for sale. These projects are mainly retail, medical, and single-tenant developments with budgeted capital expenditures of $2,211,000 to $19,989,000 and represent a total of $311 million of total investment with $77 million in equity provided by NLA investors. As NLA analyzes new project opportunities provided by developers, we focus on the lease terms, the credit behind the lease, and the spread between development cost and exit cap rate as determined by the lease terms. If you are a developer seeking 100% of the required capital to fund the development of your next project, contact Ron Johnston at 859-272-3819. We will be happy to answer any questions you may have regarding our non-recourse funding platform.