STRUCTURING THE DEAL              Real Estate Development Workshop:  Fundamental Skills for Real Estate Development Profes...
AgendaI. Deal/Project Analytics  – Front Door/Back Door AnalysisII. Deal Structuring To Control The Dirt  – Purchase Agree...
Project Mini-Pipeline                         (Project Could be derailed at any point during the process)       Land For  ...
HIERARCHY OF PAYOUTS                  Profits/Return            Labor/Materials           LAND   Structuring The Deal Pres...
Basic Development Profit FormulaDev Profit =                              ___ -                              NOI          ...
I. Deal/Project Analytics                              • Back Door Analysis                                   – Holds pro ...
Development Analysis                                 University Shopping Center                                        (At...
Shopping Center Mini-Case Solution                   (1) Profit Range, (2) C-O-C and Cap Rate Spread•   Step 1: Determine ...
Shopping Center Mini-Case Solution                    (3) Solve For Max Land Cost Given Required C-O-C•   Step 1: Determin...
Shopping Center Mini-Case Solution            (4) Solve For Rent Constant on Non Anchor Space•   Step 1: Determine Maximum...
II. DEAL STRUCTURINGTO CONTROL THE DIRT     Structuring The Deal Presented by Tennyson Williams   11
Deal Structuring To Control Dirt      THE TOOLS       1.    Option Contract       2.    Right of First Refusal (ROFR)     ...
1. Option ContractsOptions work as a hedge against not being able toassemble all the land needed or obtain necessary: –   ...
HOW AN OPTION WORKS• Seller unconditionally agrees to sell to Buyer  – Seller can take back-up contract(s)• Buyer pays con...
BUYER’S GOALS:–Minimize option money, maximize option period–Control property against other potential buyers        Struct...
STRATEGY: –Works best in a Buyer’s market; –May have to pay taxes, mortgage  and other carrying charges –Seller defers tax...
TACTICAL CONSIDERATIONS:  – Apply some or all of the option money    to the purchase price (works toward    equity portion...
TACTICS (continued):− The ultimate purchase price may be  contingent on changes to  entitlements or zoning− Allows buyer t...
Rolling Options:  – Allow development of contiguous parcels    incrementally  – Initial take-down may be for signage, acce...
1. b. Right Of First Refusal               NEXT BEST THING TO AN OPTIONHow It Works:  – Does not entitle the holder of the...
2. Lease with Option to PurchaseHow It Works:   Buyer leases the property from Seller for a    specified period of time a...
BUYER’S GOALS:  Minimize invested capital/maximize leasehold period  Control property against other potential buyers  G...
STRATEGY: –Works best in a Buyer’s market (no  demand);   • Seller earns income from the property     until lease expires ...
TACTICAL CONSIDERATIONS: –Annual rent can be based on a  percentage of the land’s market  value –Pay taxes, mortgage and o...
3. Seller Financing     a/k/a Purchase Money Mortgages• Generally involves the seller’s level of  sophistication (more is ...
GOALS: Acquire land:   • With minimal equity upfront   • Avoid institutional lenders   • Avoid additional investors   • Be...
STRATEGY:  – Minimize down payment  – Minimize interest rate  – Maximize term  – Get releases        Structuring The Deal ...
TACTICAL CONSIDERATIONS – Under current tax law sellers, but not dealers (as   defined in the tax code), of real property ...
4. Joint Ventures• Usually a type of partnership with a  single specific purpose in mind for  example:         Partner A =...
How It Works:  – Seller contributes the land in exchange for    an equity interest equal to the agreed upon    value of th...
Sample Structuring:1. landowner receives equity land value2. landowner receives a preferred return (cumulative or   noncum...
BUYER’S GOALS: –Avoidance of equity investment  in the land –Optimize developer’s equity for  other uses, such as entitlem...
Tips For Joint Ventures• Plan aheadfor partnership  disputes• Be prepared for dissolution  of the venture use buy-sell• Do...
5. Land Acquisition Loans• Generally institutional lenders loan  only to their strongest and best  customers who have full...
CAVEAT: Institutional lenders generally say they will  finance “up to 50%” of the acquisition price of  unimproved land if...
TACTICAL CONSIDERATIONS: –Expect to provide personal guarantees  to adjust for the absence of an income  stream produced b...
III. Deal Structuring     To Attract Capital           Structuring The Deal Presented by Tennyson Williams                ...
The Cost of Equity Vs. Debt Generally, the cost of equity is considered   to range between 4% and 8% above the   effective...
BUYER’S GOALS: –Obtain capital for acquisition,  planning, and entitlement of land –Maintain control of the enterprise –Id...
STRATEGIES: – Don’t give away the farm up front – if your   projections are off, you lose – Carefully balance all particip...
TACTICAL CONSIDERATIONS:The major areas requiring careful consideration and negotiation skills for distributing cash flows...
Distributions of Cash Flow from Operations • Pari Passu – the developer receives a % of   the distributable cash proportio...
Distribution of Cash Flow from Sale• After payment of expenses of sale and repayment of debt• Then distributed to all part...
Distributions – Example slide 1Outside investors put up 90% of the equity and developer puts up 10%.Project is 3 years in ...
Distributions – Example slide 21. Annual cash flow is distributed to outside investors   until a specified hurdle return (...
Sample Structuring (“waterfall”):  1. all cash goes to investors until they have     received return of equity in full  2....
Developer & Management Fees  • Developer’s fees for overseeing the    development of the project; typically    3%-4% of ha...
The investment vehicle can be can be a:  –Partnership,  –Limited partnership,  –LLC, or  –Corporation (C or S)           S...
A Word About Syndications:  –Syndicators, promoters, or sponsors   raise capital from investors and   charge fees and/or m...
• Some Institutional Investment Entities:  – REITs  – Pension Funds  – Insurance Companies  – Venture Capitalists  – Oppor...
Example:  – XYZ, an opportunity fund, is actively    seeking investments in joint ventures    with current owners and deve...
Q&AStructuring The Deal Presented by Tennyson Williams                                                      52
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Fundamental Skills for Real Estate Development Professionals II – Structuring the Deal to be Profitable (Tennyson Williams) - ULI Fall Meeting 102611

  1. 1. STRUCTURING THE DEAL Real Estate Development Workshop: Fundamental Skills for Real Estate Development Professionals II Structuring the Deal Wednesday, october 26, 2011 3:00 pm – 4:00 pm Presented by TENNYSON WILLIAMS 1
  2. 2. AgendaI. Deal/Project Analytics – Front Door/Back Door AnalysisII. Deal Structuring To Control The Dirt – Purchase Agreements, Option Agreements, ROFRs, Joint Ventures, Seller Financing, Lease- Purchase Options,III. Deal Structuring To Attract Equity Capital – Preferred Returns, Promotes, Waterfall Distributions, Language & Terms Structuring The Deal Presented by Tennyson Williams 2
  3. 3. Project Mini-Pipeline (Project Could be derailed at any point during the process) Land For Development Land Control/Acquisition File Rezoning Application Order Environmental/Soils Start Marketing Capital raising Cost Feasible Re-Zoning Feasibility Not Rents Not Outcome Determined RealizedCompletions,Profitability Permits Capital Raising
  4. 4. HIERARCHY OF PAYOUTS Profits/Return Labor/Materials LAND Structuring The Deal Presented by Tennyson Williams 4
  5. 5. Basic Development Profit FormulaDev Profit = ___ - NOI All-In Cost R C-O-C = _____ NOI (Unlevered) All-In Cost Structuring The Deal Presented by Tennyson Williams 5
  6. 6. I. Deal/Project Analytics • Back Door Analysis – Holds pro forma rent constant & solves for max land cost necessary to achieve a target cash-on-cost return • Front Door Analysis – Holds development cost constant & solves for minimum rent necessary to achieve target cash- on-cost return Structuring The Deal Presented by Tennyson Williams 6
  7. 7. Development Analysis University Shopping Center (Atlanta, GA)• Land size: 3.6 acres zoned C-1 General Retail• Land Cost: $1,000,000 per acre (There are 43,560 sf in 1 acre)• Maximum City Allowable FAR = .2958• Acme General Contractors has submitted a Guaranteed contract proposal for construction for $76.50psf (hard costs) + $13.50 psf (soft costs) = $90 combined.• Anchor Tenant’s preferred prototype building size is 14,797 square feet.• Recent market survey of Tenant Leases suggests the following Structures: – $8.25 psf NNNN for anchor space (cotenancy restrictions) fixed rent for 25 years – $20.00 psf NNNN for non-anchor space with 3%/yr inc.• Local Market Vacancy reports suggest stabilized rate of 7.0% NON-ANCHOR ONLY.OperExps/psf: Taxes $2.00, Insurance $.25, CAM $3.00, M-Fee $.50• Investor market appears to support cap rates ranging from 7.5% to 8.0%.• QUESTIONS : Assuming a sale of the newly completed asset upon reaching 93% occupancy, (1) Expected development profit range? $936,719 to $1,517,484 (2) Estimated Cash-On-Cost Return (C-O-C) and Spread? 8.96%, 94 To 146 bps (3) Max land cost assuming a 10% required C-O-C? $776,229 per acre (4) Required Non-Anchor Rent Constant to earn a 10% C-O-C $22.31 p.s.f.NP 7
  8. 8. Shopping Center Mini-Case Solution (1) Profit Range, (2) C-O-C and Cap Rate Spread• Step 1: Determine Maximum Allowable Building Size – 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = (Max Building size) 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = 46,386 square feet Step 2: Determine Total Project Development Cost – Land Cost 3.6 acres X $1,000,000 = $3,600,000 – Construction Cost @ $90 psf (hard & soft) X 46,386 square feet = $4,174,756 – ALL IN DEVELOPMENT COST $7,774,756 Step 3: Determine NOI – Anchor Tenant @ $8.25psf on 14,797 sf (31.9%) = $122,077 NNNN – Non Anchor Space @ $20.00psf on 31,589sf Less 7% Vac = $587,555 NNNN – Less Non-Reimburseables due to vacancy = ($12,714) NOI 696,918 Step 4: Determine Value Range – NOI / Cap Rate $696,918 / .075 = $ 9,292,240 – NOI / Cap Rate $696,918 / .080 = $ 8,711,475 Step 5: Determine Development Profit Range – Profit = Stabilized Value – All In Project Costs – $9,292,240 – $7,774,756 = $1,517,484 (19.52% straight profit) – $8,711,475 – $7,774,756 = $ 936,719 (12.05% straight profit) Step 6: Determine Development Profit % Range (Including Land Cost) – 1,517,484 / 7,774,756 = 19.52% – 936,711 / 7,774,756 = 12.05% – Cash–On–Cost = Stabilized NOI / Total Project Cost $696,918 / $7,774,756 = 8.96% (Spread = Cash on Cost – Market Cap Rate) 8.96 – 7.50 = 146bps, 8.96 – 8.00 = 94 bps 8
  9. 9. Shopping Center Mini-Case Solution (3) Solve For Max Land Cost Given Required C-O-C• Step 1: Determine Maximum Allowable Building Size – 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = (Max Building size) 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = 46,386 square feet Step 2: Determine Total Project Development Cost – Land Cost 3.6 acres X TBD = TBD – Construction Cost @ $90 psf (hard & soft) X 46,386 square feet = $4,174,756 – TOTAL PROJECT DEVELOPMENT COST (Excluding Land) $4,174,756 Step 3: Determine NOI – Anchor Tenant @ $8.25psf on 14,797 sf (31.9%) = $122,077 NNNN – Non Anchor Space @ $20.00psf on 31,589sf Less 7% Vac = $587,555 NNNN – Less Non-reimburseables due to vacancy = ($12,714) NOI $ 696,918 Step 4: Determine Maximum Total Project Cost (including land @ 10% C-O-C) – NOI / Desired C-O-C $696,918 / .10 = $6,969,180 Step 5: Determine Maximum Land Cost – Maximum Total Project Cost (including land) less Construction Cost – $6,969,180 - $4,174,756 = $2,794,424 ($776,229 per acre) 9
  10. 10. Shopping Center Mini-Case Solution (4) Solve For Rent Constant on Non Anchor Space• Step 1: Determine Maximum Allowable Building Size – 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = (Max Building size) 43,560 s.f. X 3.6 Acres = 156,816 X FAR @ .2958 = 46,386 square feet Step 2: Determine Total Project Development Cost – Land Cost 3.6 acres X $1,000,000 per acre = $3,600,000 – Construction Cost @ $90 psf (hard & soft) X 46,386 square feet = $4,174,756 – TOTAL PROJECT DEVELOPMENT COST (Including Land) $7,774,756 Step 3: Determine NOI @ 10% C-O-C – Total Project Development Cost X 10% C-O-C = $777,476 NNNN – Less Anchor Space Rent @ $8.25psf = ($122,077) NNNN $655,399 Step 4: GROSS-UP NON ANCHOR RENT BY 1 – Vacancy Rate – Non-Anchor NNNN NOI / .93 = $704,730 / 31,589 sf = $22.31psf 10
  11. 11. II. DEAL STRUCTURINGTO CONTROL THE DIRT Structuring The Deal Presented by Tennyson Williams 11
  12. 12. Deal Structuring To Control Dirt THE TOOLS 1. Option Contract 2. Right of First Refusal (ROFR) 3. Lease/Option 4. Seller Financing 5. Joint Venturing 6. A & D Loans Structuring The Deal Presented by Tennyson Williams 12
  13. 13. 1. Option ContractsOptions work as a hedge against not being able toassemble all the land needed or obtain necessary: – Entitlements, – Investor commitments, – Growth plan amendment, or – Rezoning, – Institutional commitment – Environmental analyses, for development financing Structuring The Deal Presented by Tennyson Williams 13
  14. 14. HOW AN OPTION WORKS• Seller unconditionally agrees to sell to Buyer – Seller can take back-up contract(s)• Buyer pays consideration ($) to Seller – Amount is negotiable• Buyer has to exercise option (go hard on the contract) within a specified period of time – Time period is negotiable• Seller has notax consequences until option is exercised or expires Structuring The Deal Presented by Tennyson Williams 14
  15. 15. BUYER’S GOALS:–Minimize option money, maximize option period–Control property against other potential buyers Structuring The Deal Presented by Tennyson Williams 15
  16. 16. STRATEGY: –Works best in a Buyer’s market; –May have to pay taxes, mortgage and other carrying charges –Seller defers taxes until option is exercised or expires Structuring The Deal Presented by Tennyson Williams 16
  17. 17. TACTICAL CONSIDERATIONS: – Apply some or all of the option money to the purchase price (works toward equity portion for future loans) – Make the option payments in installments (retain use of the funds for longer periods) – Tie purchase to enhanced entitlements or zoning Structuring The Deal Presented by Tennyson Williams 17
  18. 18. TACTICS (continued):− The ultimate purchase price may be contingent on changes to entitlements or zoning− Allows buyer to control the land for little initial consideration Structuring The Deal Presented by Tennyson Williams 18
  19. 19. Rolling Options: – Allow development of contiguous parcels incrementally – Initial take-down may be for signage, access, sales/leasing center, models 1,000 Acres Phase One Phase Two Phase Phase Phase Three Four Five 2010 2012 2014 2016 2018 street Structuring The Deal Presented by Tennyson Williams 19
  20. 20. 1. b. Right Of First Refusal NEXT BEST THING TO AN OPTIONHow It Works: – Does not entitle the holder of the right to force the other party to sell or lease the asset. – If and when the other party decides to sell or lease the asset to any third party, the holder of the right of first refusal can require the asset to be sold or leased to him or her for the same price and terms that the owner is willing to accept from the third party. – Doesn’t tie the land up; seller can still try to market the property Structuring The Deal Presented by Tennyson Williams 20
  21. 21. 2. Lease with Option to PurchaseHow It Works:  Buyer leases the property from Seller for a specified period of time at an agreed upon rent  Lease contains a right of Buyer to exercise an option to purchase the leased property  Best to have the price and terms spelled out in the lease or attached as a proposed contract Structuring The Deal Presented by Tennyson Williams 21
  22. 22. BUYER’S GOALS:  Minimize invested capital/maximize leasehold period  Control property against other potential buyers  Gain use of the property  24/7 Access  Post signs advertising the coming project  Assemble all the land needed, or  Obtain necessary: entitlements, plan amendment, rezoning, environmental analyses, investor commitments, or institutional commitment for development financing Structuring The Deal Presented by Tennyson Williams 22
  23. 23. STRATEGY: –Works best in a Buyer’s market (no demand); • Seller earns income from the property until lease expires or the option is exercised –Exercise of option must occur by determinable specific date Structuring The Deal Presented by Tennyson Williams 23
  24. 24. TACTICAL CONSIDERATIONS: –Annual rent can be based on a percentage of the land’s market value –Pay taxes, mortgage and other carrying charges –Tie purchase to enhanced entitlements or zoning –Some of the lease payments may be applied toward the purchase price (negotiable) Structuring The Deal Presented by Tennyson Williams 24
  25. 25. 3. Seller Financing a/k/a Purchase Money Mortgages• Generally involves the seller’s level of sophistication (more is better) as well as his or her financial circumstances, plus the current market situation• Down payments typically range from 10% to 30% of the purchase price Structuring The Deal Presented by Tennyson Williams 25
  26. 26. GOALS: Acquire land: • With minimal equity upfront • Avoid institutional lenders • Avoid additional investors • Better mortgage terms • Less cost involved Structuring The Deal Presented by Tennyson Williams 26
  27. 27. STRATEGY: – Minimize down payment – Minimize interest rate – Maximize term – Get releases Structuring The Deal Presented by Tennyson Williams 27
  28. 28. TACTICAL CONSIDERATIONS – Under current tax law sellers, but not dealers (as defined in the tax code), of real property generally can structure the purchase money mortgage as an installment transaction for tax purposes, allowing them to defer income taxes until each mortgage payment is received. – Always try to get the seller to agree to subordinate to the development loan(s); otherwise, the purchase money mortgage will have to be paid off so that the construction and permanent lenders can have first liens Structuring The Deal Presented by Tennyson Williams 28
  29. 29. 4. Joint Ventures• Usually a type of partnership with a single specific purpose in mind for example: Partner A = Landowner Partner B = Developer Partner C (maybe) = Investor (Capital Partner) Structuring The Deal Presented by Tennyson Williams 29
  30. 30. How It Works: – Seller contributes the land in exchange for an equity interest equal to the agreed upon value of the land vis-à-vis the overall value of the project – Seller’s interest equates to an interest in profits – Seller agrees to subordinate title to a construction loan – Developer provides equity and/or sweat equity, knowledge and experience, and does the grunt work Structuring The Deal Presented by Tennyson Williams 30
  31. 31. Sample Structuring:1. landowner receives equity land value2. landowner receives a preferred return (cumulative or noncumulative) on the equity value of the land3. developer receives agreed upon amount or percentage compensation (in lieu of or in addition to developer fees received during the construction and leasing periods)4. landowner and developer split balance per an agreed upon formula for priorities and percentages5. a 3-tiered structure may be used if third party equity investors are involved Structuring The Deal Presented by Tennyson Williams 31
  32. 32. BUYER’S GOALS: –Avoidance of equity investment in the land –Optimize developer’s equity for other uses, such as entitlement, planning, and construction –Boost Equity Yield Structuring The Deal Presented by Tennyson Williams 32
  33. 33. Tips For Joint Ventures• Plan aheadfor partnership disputes• Be prepared for dissolution of the venture use buy-sell• Don’t put yourself in a position to lose control of the venture• Have a viable backup plan Structuring The Deal Presented by Tennyson Williams 33
  34. 34. 5. Land Acquisition Loans• Generally institutional lenders loan only to their strongest and best customers who have fully entitled land and other assets or sources from which to repay the loan Structuring The Deal Presented by Tennyson Williams 34
  35. 35. CAVEAT: Institutional lenders generally say they will finance “up to 50%” of the acquisition price of unimproved land if at all, but the actual loan-to-value may be less depending on: 1. The lender’s risk tolerance 2. The lender’s determination of the actual value versus the contract price 3. The extent of the borrower’s equity contribution 4. The borrower’s relationship with the lender 5. The borrower’s financial strength and credit history 6. The borrower’s level of experience with the planned development 7. Estimated time before take-out will occur 8. Conditions in the market Structuring The Deal Presented by Tennyson Williams 35
  36. 36. TACTICAL CONSIDERATIONS: –Expect to provide personal guarantees to adjust for the absence of an income stream produced by the land –Consider using a revolving line of credit –Use builders’ precommitments, presales, preleasing, agricultural leases Structuring The Deal Presented by Tennyson Williams 36
  37. 37. III. Deal Structuring To Attract Capital Structuring The Deal Presented by Tennyson Williams 37
  38. 38. The Cost of Equity Vs. Debt Generally, the cost of equity is considered to range between 4% and 8% above the effective cost of debt Structuring The Deal Presented by Tennyson Williams 38
  39. 39. BUYER’S GOALS: –Obtain capital for acquisition, planning, and entitlement of land –Maintain control of the enterprise –Identify a compatible partner or partners who can provide or raise equity Structuring The Deal Presented by Tennyson Williams 39
  40. 40. STRATEGIES: – Don’t give away the farm up front – if your projections are off, you lose – Carefully balance all participants’ risks and rewards – Retain control and be clear about it – Prepare from the beginning for the possibility of dissolution of the venture – use buy-sell agreements “you cut, I choose” – Communicate frequently and clearly with the investors Structuring The Deal Presented by Tennyson Williams 40
  41. 41. TACTICAL CONSIDERATIONS:The major areas requiring careful consideration and negotiation skills for distributing cash flows include: 1. Preferred returns on equity invested 2. Priorities of payback of equity invested versus sweat equity 3. How any remaining balance will be split, if at all 4. Developer fees/Management fees Structuring The Deal Presented by Tennyson Williams 41
  42. 42. Distributions of Cash Flow from Operations • Pari Passu – the developer receives a % of the distributable cash proportionate to the % of his equity contribution • Preferred Return (“Pref”) – initial distribution of cash flow to investors in a specified % before any other distribution • Promote – distribution of the remaining cash to the developer in an amount disproportionate to his actual % of equity invested (as an incentive) Structuring The Deal Presented by Tennyson Williams 42
  43. 43. Distribution of Cash Flow from Sale• After payment of expenses of sale and repayment of debt• Then distributed to all parties in the amount of their initial capital investment• The balance is distributed in predetermined proportions (50/50; 60/40, etc.)• Exception: IRR Preference, an investor’s specified IRR must be achieved before the balance is distributed• IRR Lookback – if an investor was to receive a specified IRR and it isn’t achieved in the final distribution, then the proportions of other investors are adjusted to cover it Structuring The Deal Presented by Tennyson Williams 43
  44. 44. Distributions – Example slide 1Outside investors put up 90% of the equity and developer puts up 10%.Project is 3 years in development stage, then produces cash flow for 5 years of operations.Property is sold at the end of the 5th year of operations. Structuring The Deal Presented by Tennyson Williams 44
  45. 45. Distributions – Example slide 21. Annual cash flow is distributed to outside investors until a specified hurdle return (c.f., 9%) is received (the “pref”);2. Then the developer may receive a disproportionately larger share (than his 10%) of any additional distributions (the “promote”);3. All remaining money may then go to the investors;4. At sale, the net proceeds after repayment of debt may go first to the outside investors to repay their invested capital, then to repay the developer’s capital, then be divided in a specified split. Structuring The Deal Presented by Tennyson Williams 45
  46. 46. Sample Structuring (“waterfall”): 1. all cash goes to investors until they have received return of equity in full 2. cash then goes to investors until they have received their priority return on equity (cumulative or noncumulative) 3. next cash goes to developer until agreed amount of percentage is reached (perhaps in addition to developer fees paid during operations) 4. the balance is divided according to negotiated split Structuring The Deal Presented by Tennyson Williams 46
  47. 47. Developer & Management Fees • Developer’s fees for overseeing the development of the project; typically 3%-4% of hard and soft costs • Management fees for overseeing day- to-day management of the project: typically 3%-4% of effective gross income (adjusted gross income) Structuring The Deal Presented by Tennyson Williams 47
  48. 48. The investment vehicle can be can be a: –Partnership, –Limited partnership, –LLC, or –Corporation (C or S) Structuring The Deal Presented by Tennyson Williams 48
  49. 49. A Word About Syndications: –Syndicators, promoters, or sponsors raise capital from investors and charge fees and/or may retain an interest in the venture –Complex tax and securities laws are involved • Violation of the securities laws carries severe penalties Structuring The Deal Presented by Tennyson Williams 49
  50. 50. • Some Institutional Investment Entities: – REITs – Pension Funds – Insurance Companies – Venture Capitalists – Opportunity Funds Structuring The Deal Presented by Tennyson Williams 50
  51. 51. Example: – XYZ, an opportunity fund, is actively seeking investments in joint ventures with current owners and developers. 1. The developer monetizes part of the asset value of entitled raw land, or 2. Acquires a financial partner for acquisition and development financing. Structuring The Deal Presented by Tennyson Williams 51
  52. 52. Q&AStructuring The Deal Presented by Tennyson Williams 52
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