Real Estate Joint Ventures: Waterfall Structures, Developer Promote, IRR Lookback, Clawback and Catchup

Calculating and Structuring Promote, Planning for Phantom Income, and Taxation of Carried Interest

Note: CPE credit is not offered on this program

A live 90-minute premium CLE webinar with interactive Q&A


Thursday, January 30, 2020 (in 11 days)

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926

This CLE webinar will guide real estate counsel on the various methods of structuring waterfall provisions and promote payments to managers/developers in real estate joint venture agreements. The panel will examine the tax implications for distributions and promote payments.

Description

Waterfall provisions governing distributions are one of the most critical components of real estate joint venture agreements. After investors have received a return of their capital and IRR, promote payments are made to developers/managers.

While promote is usually structured on a "deal by deal" or a "whole fund" basis, there are a host of variations that enable managers/developers, and investors to better align distribution of profits to the joint venture's goals.

Counsel must draft allocation provisions to avoid phantom income associated with promote payments. Tax distribution clauses may be added to address phantom income. Other critical requirements include clawbacks, which allow investors to recoup promote payments if the investor did not receive its return on investment.

Listen as our authoritative panel of real estate finance practitioners discusses structuring waterfall provisions and promote payments in real estate joint venture agreements as well as the tax impact for distributions and promote payments.

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Outline

  1. Calculating IRR and promote
  2. Structuring promote
  3. Clawback and claw-forward provisions
  4. Tax ramifications and allocation provisions

Benefits

The panel will review these and other high priority issues:

  • What are the various methods for calculating promote?
  • What are the best approaches for structuring promote provisions?
  • How can counsel anticipate and plan for phantom income?

Faculty

Hoffman, Seth
Seth R. Hoffman

General Counsel and Senior Vice President
Fairstead

Mr. Hoffman is Senior Vice President and General Counsel of Fairstead where he oversees all legal aspects of the firm,...  |  Read More

Weber, Benjamin
Benjamin R. Weber

Partner
Sullivan & Cromwell

Mr. Weber has experience in a broad range of commercial real estate, corporate finance, and private and public...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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