Are there any multi developers out there right now that are getting JV money? We have a few projects that are yielding north of a 6% ROC, but the best we seem to be able to get is participating pref. Was wondering what the landscape is like out there for others.
For reference, a smaller shop, but effectively a smaller subsidiary of a well known name in the industry.
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Yes we have JV partners for multi developments as long as the deals are conservatively above 6% YoC and not aggressive assumptions (which is the key part). If you're assuming sub 5.25% exit caps and growth above 3% rents with aggressive lease up and best-case scenario terms for refi/flip then people are going to have reservations and want the protection that participating pref provides compared to just common equity in a JV structure. Everyone has cash they are sitting on so if the deal is that amazing (which isn't too likely right now) then they'd be giving you any capital stack structure you wanted just to be a part of the deal. But, if they think you are being way too optimistic then they are going to give you the money only on their terms.
We’re assuming 4.75-5 exit cap on deals that will sell in 3-4 years. 6 YOC. have to scrap and may only get one JV term sheet, but atleast getting something.
6% trended or untrended? what's your basis? luxury?
Untrended. Suburban garden "luxury".
Walk up? Check size? MSA?
Hello Fellow Monkeys: Looking at a few deals right now that pencil around the above returns but cannot get any LP's to commit to JV equity. Does anyone know of any groups that are active? Like the above poster stated everyone wants to pump in pref @ 17%.
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