Reporting Frequency to LP
How frequent are you reporting back to your LP, specifically if you're doing ground-up developments? Working with the same LP on three projects of ours and we're reporting weekly on the performance of the project, and having calls every two weeks. With some of our other LPs we're doing reporting once a month, together with financials on the project. Calls aren't regularly scheduled, but we're available to grab a call for any questions they might have about the report or any issues they're concerned about.
Depends - we have a couple LPs who we structure everything as a JV with (we manage day-to-day but all major decisions are voted on). With them, we have bi-weekly or monthly calls for regular updates and provide monthly financial updates. For true LPs who just give us money and have no decision making power, it's quarterly.
Could you clarify this. I see both as common shareholders within a joint venture agreement. Maybe that agreement has less control rights but both are JVs. As your differentiation is that and between Preferred shares, who do not have a management agreement. So are you saying your LP's are Pref Equity participants?
Sounds like LPs in one-off JVs vs LPs in discretionary funds. Take Hines or Greystar for example, both do one-off JVs with LPs and also have discretionary funds they can use as the JV LP. On the one-off JV they’ll be reporting to the LP at least once a month and major decisions involve both, whereas if they’re using a discretionary fund they’ll make the decisions and then typically issue quarterly updates to the LPs in the fund.
When I was in development, I worked across 3 projects with the same LP. When things were going well it was email updates at end of the week with in person monthly meetings. Once performance slipped across all 3 projects it turned to weekly calls with more detailed updates. On the other development my office was working on, it was weekly calls and monthly meetings as it wasn’t going to plan.
I’m on LP side now. How frequently we request meetings comes down to our level of trust with the GP, how many projects they’re working on for us, and how they’re performing. We’re working with a new GP on one project and doing fortnightly calls as it’s going relatively okay but it’s still our first time working through key workstreams with them. We’ve another GP across 3 projects and doing weekly calls as there’s issues on 1 and a lot of moving parts on the others. On another, it’s monthly as everything’s going fine and we’ve worked together on multiple projects which all went well.
Thanks, this gives me some perspective. I think that's a fair point when it's a newer relationship, more frequent reporting is requested to understand what the GP is doing. We started working with a new LP at the beginning of last year and they ask for weekly reporting on all projects. I think the projects we have with them have done fine, nothing that we haven't disclosed to them, but I think this LP just has too little knowledge or experience on developments. They really start questioning the pre-con process and everything needed there before we put an actual shovel in the ground. It's almost redundant because sometimes we just have to wait on the city which can be weeks for whatever approval we're waiting on
What sort of questions are they asking? Approaching it from an LP perspective, my guess is they’re trying to understand what is required to get on site, when any deliverables required will be produced, and then tracking you vs. these timelines. My most time consuming GP relationship is with a group who are way too casual about timelines, missing a few days here and there on different work streams, and this has incrementally led to being 2 months behind schedule 9 months into the project which is pretty frustrating. My least time consuming GP relationship is a group who are extremely focused on timelines, they rarely miss them and this builds a lot of trust as a result.
Monthly reporting, with ad hoc meetings, visits and major decision updates as needed in between.
Worked at an apartment developer with institutional LPs. When the projects were in the pre-construction stage, a monthly update email with entitlement progress and any interesting market info (like a new office tenant signs big lease nearby). Once construction commenced, a weekly detailed progress email would be sent out (with photos and progress % updates) along with a weekly call updating how each of the projects were going.
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