The second capital call finished my $50k in a ground-up medical office

I'd point somewhere earlier than the reserve. You funded a deal that was not entitled. Nine months of your delay happened before a shovel moved, and a sewer moratorium review plus a turn lane requirement is a normal outcome, not bad luck. Every month of pre-permit delay is a month of land carry and a month of cost escalation on a budget priced at a moment in time.

I don't put money into anything until the site plan is approved and the utility letters are in hand. That costs me the entitlement upside, and I've watched people make good money on that risk. I've also watched two people lose everything on a wetland determination. The capital call and the dilution clause are how you got hurt. The pre-entitlement funding is where you got exposed.

My near miss was much smaller and the same shape. Small town, 6,000 sf building on the main street, sponsor wanted $25k from me. I asked for the schedule assumptions and he sent me a one page timeline with no dates on the utility work, and I passed on the grounds that I didn't understand it. Not because I was smart, I just couldn't follow it. Turned out the electric service upgrade for that block was a two year project. Sometimes not understanding something is the whole defense.

One thing I still want to check. When the second capital call came and you skipped it, was that allowed? I assumed a capital call was something you had to pay. So you can decline and the penalty is dilution?

juniper, it depends entirely on what the operating agreement says. Some make it mandatory with real remedies, most make it optional with dilution as the consequence, and the dilution can be pro rata or heavily weighted against the non-funder like sable's was.

sable, the switchgear thing is worth naming for anyone reading. My crews were on a clinic build where the gear slipped from spring to the following January. Everything downstream stops, because you cannot get a temporary certificate of occupancy without permanent power, and inspections queue behind it. On the last three jobs I bid, the electrical distribution equipment got ordered before the foundation permit was even in hand. If a sponsor tells you they're ordering gear on the normal sequence, ask when. That single date moves the schedule more than the framing does.

The anchor cutting from 9,000 to 5,500 is the part I'd want the full story on, because in medical office that usually means the group's own numbers changed and it rarely reverses. What it does to the pro forma is worse than the lost square footage. You now have two small suites instead of one anchor, so you're paying two TI packages at medical rates, two commissions, and two rounds of free rent, and your rent commencement dates slide 6 to 12 months each. That's a lease-up budget nobody wrote down.

81% leased at month 38 on a building that was supposed to stabilize at 22 is not a disaster from where I sit. You'll probably see most of your capital back eventually. What you won't see is the time value, and that line rarely shows up in a deck.