Real Estate & REITs
Walk me through a simple JV equity waterfall with an 8% pref and a 20% promote. Use numbers.
Model answer
Setup: $10M of equity, 90/10 between LP ($9M) and GP ($1M); one-year hold; total distributions at exit of $12.0M; waterfall is
- return of capital plus an 8% preferred return pro rata, then
- …
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