Gap Financing / “But For” Underwriting

Governmental entities often struggle with the question of how much financial assistance to provide to development projects, especially where there is little local precedent for evaluating developer requests. SB Friedman is noted for our rigorous “but for” or “gap analysis” approach to underwriting and sizing public assistance. Through our analysis, we identify the key project/site characteristics that are challenging the financial feasibility of the project – whether extraordinary site costs, challenges related to infill development, achievable rents or other factors. A complete understanding of the project economics allows us to recommend an amount and type of assistance tied to the specific project and structured appropriately to address the particular project challenges. This approach also aids in clearly articulating public policy related to the public-private partnership (e.g., addressing environmental contamination, helping to prove a new market).

SB Friedman has provided over 160 evaluations of proposed public-private financial transactions in recent years for a wide range of development types and financing tools, including tax increment financing, tax abatements, tax credits, bonds, special assessments, land write-downs and related gap financing tools.