How do equity placement teams at the large brokerages (CBRE/JLL/HFF) work?

opus1723's picture
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For instance, when a brokerage puts together a memo for a joint venture opportunity in a particular project with a designated sponsor, does it mean that the sponsor has already "won" the deal provided they are able to secure the necessary financing?

Or put another way, do you ever see such a memo created for properties that are being actively marketed? Let's say an LP decides to JV with the sponsor, is it possible for another group to come in an scoop up the deal?

Thanks

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Oct 8, 2017

Yeah we would never engage equity brokers before having a deal under control. Be it a piece of land that we already own, an option contract, or being in our study. I'm not even sure how an equity broker would view this. Probably would require a hefty breakup fee.

It's sort of a catch-22 though, in that a seller isn't going to award you the deal unless they have some degree of certainty that you're going to close. Usually we would float the deal to a couple of existing LP relationships before putting the deal under contract and give the broker/seller an indication of their interest.

Just another example of this business all coming down to relationships.

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Oct 8, 2017
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