How do you value a mid-project partner take out?
LP wants to be taken out post construction but pre lease up. How would you value their position. Would it be okay just to assume whatever there basis was, plus a, say, 10% profit on cost?
| +112 | Is anybody just going to leave the industry? | 38 | 41m |
| +41 | CRE Recruiting for a Career - crazy? | 10 | 6h |
| +31 | Exits from REPE | 16 | 5h |
| +26 | Multifamily firms collpasing in Dallas whose next? | 8 | 3d |
| +23 | Arbor Realty Trust in 2026 | 13 | 45m |
| +23 | Red Flag? Commissions-only acquisitions roles | 8 | 3h |
| +21 | Q3/Q4 CRE Job Market Optimism (or lack thereof) | 10 | 4h |
| +18 | LOI Underwriting / Due Diligence | 1 | 1d |
| +15 | NYC Real Estate Job Market | 6 | 3h |
| +13 | Family Office vs REPE | 9 | 4h |
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.
Really needs to be a discounted cash flow valuation.... project the cashflows/terminal values of the LP interest to completion, then discount back to today's value at some appropriate risk determined rate. Not an easy assignment, lots of assumptions, but that is the deal.
If they are "needing" to get out, one could "exploit" the situation... as many secondary market buyers of LP interests want to do... your call on how to treat a partner. The illiquid nature of the deal does relate to a real discount potentially, and cost of capital of the buyer (which may be the sponsor in your setup), is a factor... all this would set the "discount rate' in the DCF.
If they would be happy with basis + 10% and you think a fair deal with some upside a buyer, may be fair/simple way to do.
I wonder if thats how it went down here: https://renx.ca/marlin-spring-replace-boardwalk-riocan-jv-condo-develop…
Anyone know word on the block?
No idea about this deal, but it the sale is strategic (i.e. not out of a pure default or insolvency situation), the price would need to be "fair" an some process like the DCF I described likely occurred. To be clear, these are going to be heavily negotiated deals, you can bet each side will come with a methodology that supports their respective positions.
Et impedit ducimus corrupti commodi corrupti ducimus alias. Voluptatum aperiam pariatur eligendi dolorem facilis. Recusandae quis exercitationem consequatur magni in. Consequatur magnam maiores voluptates numquam provident est ipsam. A quod laborum incidunt.
Corporis asperiores quibusdam natus eum atque omnis. Consectetur odit nulla ipsam suscipit. Libero similique optio ad pariatur. Magnam rerum quo unde voluptas aut nobis. Recusandae qui ut autem sint mollitia. Asperiores mollitia laborum rerum velit nesciunt. Quibusdam sed id dolores voluptates in consequatur dolores.
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...