JV Partnerships and Waterfall Structures

limited partnerships

• general partnerships

  • 1-10% of equity requirement

• limited Partner

  • 90 - 99% of equity requirement

General Partner

• responsible for operations and performance of property

limited partner

non operating capital partner

GP receives outsized returns based on performance

• promoted interest

Acquisition fee

• 1-2% of purchase price

Asset Management fee

• 0,% t 1 % of equity invested

• 1-2% of effective gross revenue

Construction Management Fee

• 4-7% of construction cost

Disposition fee

• 1- 2% of sale price

preferred return

• Pari Passu

• 6 - 9% IRR

Second Hurdle

• Ex. up to 14% IRR

• 20% promoted intrest

Thirf Hurlde

• Ex: Over 14 % IRR

• 35% Promoted Interest

over preferred return

• 30% to Sponsor, 70% to members

• Sponsor receives

  • 30%+(70%*5%)= 33,5%

  • Limited Partners receives:

  • (70%*95%)=66,5%