Lets say you're in a JV for a development project that is coming to loan maturity. Rather than sell you want to refinance and hold long term. How would you change/create a waterfall JV operating agreement under this scenario? Essentially there are two waterfalls within this agreement right...1) to treat the allocation of proceeds from the refinance loan (new loan minus original dev loan) and then 2) how to treat the distribution of CF and sale proceeds during the long term hold period.
Curios on anyone's thoughts on how they would structure this type of situation.
I'm confused you already have a JV agreement and now you're asking how the refi proceeds should be treated?
Or are you on the front end of this and trying to figure out how you should document this potential scenario?
The agreement should have a shotgun clause, where upon a capital event, pro-rata splits are established to crystalize the GP's share
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