Programmatic Real Estate Joint Ventures: Deal Structures, Negotiation Strategies, Recent Trends and Developments

Description

As the real estate market begins to recover and new acquisitions are taking place, sponsors and investors are looking to team up to seize opportunities emerging from the distress. Programmatic JVs offer a timely and important approach to partnership investing.

Programmatic real estate JVs can provide economic and competitive advantages for both sponsors and equity investors. Developers and operators seek reliable sources of capital to deploy quickly, while equity investors look for sustainable partnerships with experienced and reputable sponsors. Programmatic or platform real estate JVs allow the parties to invest as part of a master program instead of deal-by-deal transactions and thus maximize efficiencies in time, capital deployment, management, and expenses.

Terms unique to programmatic JVs include investment parameters, deal sharing and exclusivity, discretion, and termination of the relationship. Structurally, JVs may take the form of either a holding company, with programmatic elements incorporated into a master venture agreement, or a series of independent ventures tied together by a framework agreement governing various aspects of the ongoing relationship between the two parties. One of the critical issues that the parties must negotiate is the pooling of economics, namely how returns will be distributed and promote paid to the sponsor, on a deal-by-deal and/or portfolio basis.

Listen as our authoritative panel of real estate practitioners walks you through current market trends concerning programmatic real estate JVs. The panel will discuss alternate structures for programmatic JVs and key JV agreement terms from the perspectives of the sponsor and capital investor.