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

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Tuesday, February 23, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will guide real estate counsel through the basic components of a real estate joint venture, including attention to provisions for allocating management rights and responsibilities, establishing manager/developer promote, structuring capital contributions (and remedies for failure to fund), distributing available cash, reflecting the agreed transfer rights, providing for an orderly exit (if appropriate), and resolving disputes.

Description

Joint venture arrangements are subject to very few hard and fast rules, which allows the parties great flexibility in setting agreed terms. There are numerous factors to consider when drafting a joint venture agreement. These include the purpose of the joint venture, the management arrangements, procedures for calling capital and penalties for failure to fund, distribution of available funds (which may include a promoted interest), transfer rights, exit mechanisms, and dispute resolution.

Given the inherent flexibility and the multitude of factors to consider when drafting a joint venture agreement, the overriding consideration should be to memorialize an arrangement that properly meets your client’s objectives and needs.

Joint venture agreements don’t really follow a stock package of terms. Instead, the terms are developed on a "deal by deal" basis taking advantage of a host of available variations that enable counsel to align the structure of the joint venture to meet a client’s goals.

Listen as our authoritative panel of real estate finance practitioners discuss considerations for real estate joint venture agreements.

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Outline

  1. Purpose
  2. Management
  3. Capital contributions
  4. Distributions
  5. IRR and promote
  6. Transfer rights
  7. Exit mechanisms and Dispute Resolution

Benefits

The panel will review these and other high priority issues:

  • What are the various methods for calling capital and penalizing those who fail to fund?
  • What are the best approaches for structuring promote provisions?
  • What transfer rights should apply to limit transferring interest in a joint venture?
  • Is the ongoing pandemic impacting joint venture terms and, if so, how?

Faculty

Hoffman, Seth
Seth R. Hoffman

General Counsel
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 course handouts.

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