I'm seeing deals fall through or sellers take off market because exits are no where near pro formas. I saw a KKR backed deal up for sale a year or two after acq; looked at their capex history and it was a huge spend, little rent growth achieved, sponsor was started by some brokers a few years ago, etc etc.
I've seen similar with big name LPs, although smaller than KKR. Is anyone else seeing valuations not pan out during sale a few years after their acq's, or groups getting burned due to purchasing at high basis?
These same deals I'm seeing, if you back their purchase price into a /unit or /sf basis, they are basically offering to exit at their 'par', so your achieved coc becomes your return... pricing always starts out at a price wayyy above replacement too, which may be justified to in place rents/cap rate, but still, the values are so off base from the cost of the hard asset....
Thoughts?
Voluptas voluptates repudiandae laboriosam cum. Voluptas iure neque vel autem quam. Rerum asperiores et illum. Et voluptate cum non iure voluptatem sed.
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...