We have a couple ground-up multifamily developments (total cost of each project ~$50MM). We need a Co-GP partner that can help us take down the land as well as guarantee the debt. My firm can handle everything else including construction.
I know this is a big ask, which is why we are flexible with our partnership terms and also probably why we are struggling to find interested parties.
Does anyone know any PE firms that might fit this role?
When is land take down? At what part in entitlement process? What is risk on that front?
I don't really see any developers taking this one and losing out on dev fee. Are you bringing equity?
Land is completely entitled and ready to purchase now. Only risk is if the City doesn’t approve the site being annexed, which is very unlikely.
We would be bringing part of the equity.
Yes, we are willing to negotiate a split of the development fee.
Sounds like what you're looking for is a guarantor, not a co-GP.
And how are you going to fund the construction equity if you can't even afford the land?
Through the Co-GP that I am looking for.
Well, not to be obnoxious about it, but it does not sound like you can handle the construction yourself, then.
What you are looking for is an LP, and probably paying a third party guarantor.
Perhaps a better way to go about this would be to sell the sites to an actual developer at a slightly stepped up basis (you make some money) and demand a CM fee or something... otherwise, why is a developer effectively paying you a huge portion of the upside here for being little more than an owner's rep?
what market
Houston
Silverpeak does Co-GP equity, but won't guarantee your debt. Most Co-GP firms are gonna have the same deal. If you can find someone to sign on debt for you, expect them to take a very large fee in return for that (massive) risk.
Is there a typical % fee for someone that only guarantees the debt?
Trying to understand here, but why would you take Silverlakes co-gp equity and cut them into the dev fee and possibly promote when they are not even guaranteeing the debt. Why not raise as much lp equity as possible? Only reason I see a GP using silver lake co-gp equity would be to not tie up capital in one project (assuming their capital constrained) or to diversify their capital among different investments. Even then, why not raise less sophisticated capital as part of the gp stack rather than going with Silverlake.
Can you explain how these Co-GP firms work in terms of most of them having the same deal? High level. Have always been curious.
They just put up equity needed for the GP Equity piece and let the other Co-GP/Development partner run the show?
try SYM Real Estate Capital. This is what they do. SYMREC.COM
Cypress Equities in LA has done this a few times and helped the Calida Group get their start. Great group.
PM me please
Hire a good debt/equity broker and they can make these introductions for you
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