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    Sample Real Estate Joint Venture Waterfall Structure

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    hogantec
    This document outlines a sample real estate joint venture structure between an institutional partner and developer partner. It details the distribution waterfall and hurdle rates at different tiers as well as projected cash flows, returns, and distributions over a 5 year period. The institutional partner receives preferred returns of 12-18% while the developer partner receives incentive distributions above certain hurdle rates, with the potential to receive up to 40% of remaining cash flows in the third tier.

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    Sample Real Estate Joint Venture Waterfall Structure

    Uploaded by

    hogantec
    115 views6 pages
    This document outlines a sample real estate joint venture structure between an institutional partner and developer partner. It details the distribution waterfall and hurdle rates at different tiers as well as projected cash flows, returns, and distributions over a 5 year period. The institutional partner receives preferred returns of 12-18% while the developer partner receives incentive distributions above certain hurdle rates, with the potential to receive up to 40% of remaining cash flows in the third tier.

    Original Description:

    SAMPLE REAL ESTATE JOINT VENTURE WATERFALL STRUCTURE

    Original Title

    SAMPLE REAL ESTATE JOINT VENTURE WATERFALL STRUCTURE

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    This document outlines a sample real estate joint venture structure between an institutional partner and developer partner. It details the distribution waterfall and hurdle rates at different tiers as well as projected cash flows, returns, and distributions over a 5 year period. The institutional partner receives preferred returns of 12-18% while the developer partner receives incentive distributions above certain hurdle rates, with the potential to receive up to 40% of remaining cash flows in the third tier.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    115 views6 pages

    Sample Real Estate Joint Venture Waterfall Structure

    Uploaded by

    hogantec
    This document outlines a sample real estate joint venture structure between an institutional partner and developer partner. It details the distribution waterfall and hurdle rates at different tiers as well as projected cash flows, returns, and distributions over a 5 year period. The institutional partner receives preferred returns of 12-18% while the developer partner receives incentive distributions above certain hurdle rates, with the potential to receive up to 40% of remaining cash flows in the third tier.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
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    SAMPLE REAL ESTATE JOINT VENTURE WATERFALL STRUCTURE

    Distributions
    Distributions

    Institu

    Ope

    Institutional
    Partner

    Hurdle Rate

    Developer
    Partner

    (up to)

    1.
    2.
    3.
    4.

    Preferred Return
    First Tier
    Second Tier
    Third Tier

    Pro Rata

    12.00%
    15.00%
    18.00%

    Initial

    90.00% 10.00%
    72.00%
    8.00%
    63.00%
    7.00%
    54.00%
    6.00%

    Year 1

    Year 2

    Leveraged Cash Flows

    (20,000,000)

    1,500,000

    1,500,000

    Equity Draws
    Institutional Partner
    Developer Partner
    Total

    (18,000,000)
    (2,000,000)
    (20,000,000)

    0
    0
    0

    0
    0
    0

    1. Preferred Return
    Institutional Partner
    Developer Partner
    Total

    0
    0
    0

    1,350,000
    150,000
    1,500,000

    1,350,000
    150,000
    1,500,000

    Remaining Cash Flow

    2. First Tier
    Institutional Partner
    Developer Partner (Pro Rata)
    Developer Partner (Incentive)
    Total

    0
    0
    0
    0

    0
    0
    0
    0

    0
    0
    0
    0

    Remaining Cash Flow

    3. Second Tier
    Institutional Partner
    Developer Partner (Pro Rata)
    Developer Partner (Incentive)
    Total

    0
    0
    0
    0

    0
    0
    0
    0

    0
    0
    0
    0

    Remaining Cash Flow

    4. Third Tier
    Institutional Partner
    Developer Partner (Pro Rata)
    Developer Partner (Incentive)
    Total

    0
    0
    0
    0

    0
    0
    0
    0

    0
    0
    0
    0

    Remaining Cash Flow

    (18,000,000)

    1,350,000

    1,350,000

    TOTAL NET CASH FLOWS


    Institutional Partner

    Developer Partner
    Total

    (2,000,000)
    (20,000,000)

    150,000
    1,500,000

    150,000
    1,500,000

    Institutional Partner IRR

    18.1%

    Institutional Partner ROI


    Multiple

    2.13

    Developer Partner IRR

    32.8%

    Developer Partner ROI


    Multiple

    3.79

    Deal IRR

    19.9%

    Deal ROI Multiple

    2.30

    CAPITAL DISTRIBUTIONS:
    1. Preferred Return
    Beginning Balance
    Equity Draws
    Accrual
    Subtotal
    Preferred Return
    Ending Balance
    Check

    12.00%

    2. First Tier
    Beginning Balance
    Equity Draws
    Accrual
    Preferred Return Paid
    Subtotal
    First Tier Paid
    Ending Balance
    Check

    15.00%

    3. Second Tier
    Beginning Balance
    Equity Draws
    Accrual
    Preferred Return Paid
    First Tier Paid
    Subtotal
    Second Tier Paid
    Ending Balance
    Check

    18.00%

    12.00%

    15.00%

    18.00%

    Initial

    Year 1

    Year 2

    0
    (18,000,000)
    0
    (18,000,000)
    0
    (18,000,000)
    (18,000,000)

    (18,000,000)
    0
    (2,160,000)
    (20,160,000)
    1,350,000
    (18,810,000)
    1,350,000

    (18,810,000)
    0
    (2,257,200)
    (21,067,200)
    1,350,000
    (19,717,200)
    1,350,000

    0
    (18,000,000)
    0
    0
    (18,000,000)
    0
    (18,000,000)
    (18,000,000)

    (18,000,000)
    0
    (2,700,000)
    1,350,000
    (19,350,000)
    0
    (19,350,000)
    1,350,000

    (19,350,000)
    0
    (2,902,500)
    1,350,000
    (20,902,500)
    0
    (20,902,500)
    1,350,000

    0
    (18,000,000)
    0
    0
    0
    (18,000,000)
    0
    (18,000,000)
    (18,000,000)

    (18,000,000)
    0
    (3,240,000)
    1,350,000
    0
    (19,890,000)
    0
    (19,890,000)
    1,350,000

    (19,890,000)
    0
    (3,580,200)
    1,350,000
    0
    (22,120,200)
    0
    (22,120,200)
    1,350,000

    STRUCTURE

    Developer
    Partner
    Incentive

    0.00%
    20.00%
    30.00%
    40.00%

    Year 3

    Year 4

    Year 5

    1,500,000

    1,500,000

    40,000,000

    0
    0
    0

    0
    0
    0

    0
    0
    0

    1,350,000
    150,000
    1,500,000

    1,350,000
    150,000
    1,500,000

    24,495,806
    2,721,756
    27,217,563

    12,782,437

    0
    0
    0
    0

    0
    0
    0
    0

    3,956,408
    439,601
    1,099,002
    5,495,012

    7,287,426

    0
    0
    0
    0

    0
    0
    0
    0

    4,419,242
    491,027
    2,104,401
    7,014,669

    272,756

    0
    0
    0
    0

    0
    0
    0
    0

    147,288
    16,365
    109,103
    272,756

    1,350,000

    1,350,000

    33,018,745

    150,000
    1,500,000

    150,000
    1,500,000

    Total Incentive to Developer


    Partner

    6,981,255
    40,000,000

    3,312,506

    Year 3

    Year 4

    Year 5

    (19,717,200)
    0
    (2,366,064)
    (22,083,264)
    1,350,000
    (20,733,264)
    1,350,000

    (20,733,264)
    0
    (2,487,992)
    (23,221,256)
    1,350,000
    (21,871,256)
    1,350,000

    (21,871,256)
    0
    (2,624,551)
    (24,495,806)
    24,495,806
    0
    24,495,806

    (20,902,500)
    0
    (3,135,375)
    1,350,000
    (22,687,875)
    0
    (22,687,875)
    1,350,000

    (22,687,875)
    0
    (3,403,181)
    1,350,000
    (24,741,056)
    0
    (24,741,056)
    1,350,000

    (24,741,056)
    0
    (3,711,158)
    24,495,806
    (3,956,408)
    3,956,408
    0
    28,452,215

    (22,120,200)
    0
    (3,981,636)
    1,350,000
    0
    (24,751,836)
    0
    (24,751,836)
    1,350,000

    (24,751,836)
    0
    (4,455,330)
    1,350,000
    0
    (27,857,166)
    0
    (27,857,166)
    1,350,000

    (27,857,166)
    0
    (5,014,290)
    24,495,806
    3,956,408
    (4,419,242)
    4,419,242
    0
    32,871,456

    Cible 1

    TRI 1
    20.0000%

    1/1/2002
    -10

    1/1/2003
    2

    1/1/2004
    2

    1/1/2005
    2

    1/1/2006
    2

    1/1/2007
    2

    TRI 2
    100.0000%

    4/1/2007
    -10

    7/1/2007
    2

    10/1/2007
    2

    1/1/2008
    2

    4/1/2008
    2

    7/1/2008
    2

    20%

    Fonction FLUX(n;cible;plage)
    n => nombre de mois entre 2 chances

    Cible 2

    100%

    cible => le TRI annuel atteindre


    plage => rfrence d'un vecteur ligne ou colonne

    1/1/2008
    2

    1/1/2009
    12

    VBA
    #NAME?

    10/1/2008
    2

    1/1/2009
    10.65174688

    VBA
    #NAME?

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