Refinance and IRR questionSubscribe
For a ground up multifamily development I've heard that a target IRR of 18-22% is generally considered acceptable for a hold of around 5 years.
However, in a scenario where you would be able to pull out all of the of the equity at refinance upon stablization, how can this be true? even if you were the LP on the deal and the GP got a huge promote after 10 or 12%, it seems to me you would still be getting a much higher IRR than 22% at reversion at the end of year 5. Am I missing something?