Real (Estate) Negotiations Stories #1: How I Filled a $4 Million Funding Gap in Fort Myers
Fernando Levy Hara, AMDP ’09, leverages his decades of experience in real estate in Real Estate Negotiation Essentials: Dealmaking Techniques & Simulation, where participants learn impactful real estate negotiation techniques and immediately apply them in an online dealmaking simulation.
One of our most popular and entertaining instructors, Fernando reinforces his session teachings with personal stories. We wanted to share some of those stories to preview the program in this three-part series.
I was involved in a challenging real estate development project in Fort Myers, a 240-unit rental apartment community. The project’s general contractor (GC) was a well-established national company, but this was their first venture in Florida. The construction loan was $58 million, plus a $25 million equity requirement that had to be funded before the lender would release their first funds.
We had aligned all our investors to meet the $25 million equity requirement. However, at the eleventh hour, one of our key investors informed us they could not contribute their $4 million share. This unexpected setback put us in a precarious position. Without that funding, the construction would halt, as the lender would not cover the shortfall.
After an intense search for a solution, we secured a commitment from an investment fund to fill the $4 million gap. Unfortunately, their funding would not be available for another three months, leaving us with a critical liquidity challenge. We knew that a pause in construction would raise alarm among the investment fund and the lender. The lender might declare a default and cancel the loan, jeopardizing the entire project.
The general contractor was also under pressure. A construction halt would force them to suspend operations, deal with idle crews, manage subcontractors with delayed contracts, and address material deliveries already in progress. On top of that, they were concerned about their reputation, as this project was their entry into Florida, a state experiencing a significant construction boom.
This situation highlighted the importance of understanding our Best Alternative to a Negotiated Agreement (BATNA) and the other party’s BATNA. Recognizing the GC’s stake in maintaining its reputation and securing a foothold in Florida, we proposed a solution: they could lend us the funds to cover the next three months of payment certificates while we awaited the investment fund’s contribution.
Their initial response signaled their interest in keeping the project on track, which gave us room to negotiate. Over the next month, we worked through the loan terms, including the interest rate, guarantees, and assurances that it would be a temporary arrangement. The lender’s restrictions further complicated this process, prohibiting junior loans. Instead, we had to structure the funding as either a Limited Partner investment or preferred equity.
Through parallel negotiations with both the GC and the lender, we ultimately arrived at a solution that satisfied all parties. The project continued without interruption, and the GC successfully launched its operations in Florida.
This experience underscores the value of strategic negotiation skills. Attending a negotiation program equips you with the tools to leverage all parties’ BATNAs, think creatively to solve complex problems, and lead successful negotiation strategies, even under pressure.
About the Program
Real Estate Negotiation Essentials: Dealmaking Techniques & Simulation
This focused program, taught by a real estate developer and expert cross-border dealmaker, distills negotiation best practices into an easily applicable form for real estate professionals.
Learn negotiation dynamics to prepare yourself – on behalf of your organization or client – to understand parties’ respective interests, claim and create value, and resolve differences to close a deal – and bring your vision to life.
Dates: April 4, 7, & 9, 2025
Location: Online
Tuition: $1,200 through January 31, $1,400