Fellow primates—
Two questions:
1.) When buying marketed land in competitive markets, is it correct to assume that offers are almost always purchase outright? Are there ever land option offers in a marketed deal, or does that make the offer less palatable from the sellers standpoint?
2.) When prepping RLV for California, how do you capture RE taxes? At stabilization? At Exit?
Thanks!
| +55 | Long Game: Development vs Asset Management | 18 | 6h |
| +34 | Future of Real Estate | 9 | 5d |
| +28 | Extremely Slow Ramp Up | 5 | 4d |
| +24 | Future of Multifamily | 15 | 17h |
| +22 | CRE Banking @ Top 3 Bank or Asset Management at Public REIT | 13 | 2d |
| +22 | No IB RO considering RE | 9 | 18h |
| +19 | Most Correct Way to Grow Rents in MF Development Underwriting | 4 | 1d |
| +18 | PGIM investment analyst low pay | 15 | 19h |
| +15 | Midweek timing of resignation? | 10 | 21h |
| +15 | Reneging MBB Offer to search for CRE job? | 8 | 15h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I'll opine on question 1 only... very much an "it depends". Some sellers actually want to stay in the deal, and rather contribute all or part for credit in the JV (and will preference offers or guide offers as such). Clearly, this results in a larger, but risker, payout for the land.
Many will want a straight cash buyout, clearly easier and less risky. To note any contract with contingencies for re-zoning/approvals or just about anything that makes closing a long time down the line (like 6 to 18 months which can be the norm in some market), is effectively an "option" contract whether stated as such or not (really true of all PSAs given the way liquidated damage clauses work). Of course, you can have "option" payments for extension (usually for financing/pre-leasing purposes), not all that weird in practice.
Bottom line, its all a function of seller's needs/desires and market power. In "hot" markets, can be tons of all-cash offers, but may not be the case in many markets. Like anything else, you are only as good as the next best alternative!
Recusandae quis et laborum aut. Repellendus consequuntur id vero nesciunt placeat rerum.
Ex ipsum neque earum est sunt. Excepturi rem iusto sed ut sit culpa quidem. Officiis et voluptatem velit ut error deleniti. Nam quos quo velit sequi optio autem. Fuga id magni corporis temporibus ab distinctio. Maiores est id deleniti voluptatem recusandae dolor vel quod.
Ipsam dolores qui et sunt at accusantium officia est. Vero sapiente corporis quia ducimus vero molestiae. Quo voluptatibus nesciunt pariatur consequatur. Voluptates mollitia minus sed laborum consectetur voluptatibus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...