Structured and arranged joint venture equity to capitalize the acquisition and repositioning of a 300-unit multifamily property in Tampa, Florida.
Challenges
The property was under contract for a higher per key amount than several recently completed transactions in the local market. Additionally, the sponsor’s track record consisted of only a few comparable multifamily acquisitions and a limited track record working with institutional equity partners.
Solutions
Identified one of a handful of equity capital providers that structure their JV waterfalls in a senior subordinate sequence rather than the traditional pari passu manner. The effect of this structure allows the capital provider to enjoy a lower basis while allowing the sponsor to earn a greater promote. Worked with the sponsor to address the comparable property differences and justify the higher basis and rental rates proposed for the subject property.
