Equity Waterfalls in Joint Ventures (SHA725)
Course Overview

Most commercial real estate deals succeed or break down around a simple concept: Does the ownership have what it takes to make it happen? The dilemma, then, that most investors contemplate is whether to be the sole investor and own all risks and profits or to partner with someone in a joint venture.

In this course, you will discover how to analyze these options for a variety of investment scenarios, balancing the rightincentives for each partner to perform at their best while avoiding conflicts of interest. You will examine examples of incentives, including profit-sharing rules, assessing the options when it comes to profit distribution and the variables involved, suchas the timing and proportions of this disbursement.

You will then gain experience applying the most common profit-sharing rules at the joint-venture level by building an equity waterfall from the ground up that includes four layers of distribution. By the end of this course, you will have more context and experience with joint ventures and the variables behind successful deals in the marketplace.

You are required to have completed the following courses or have equivalent experience before taking this course:

  • Discounted Cash Flows in Real Estate
  • Unlevered Real Estate Acquisitions
  • Real Estate Debt Financing and Scenario Analysis
  • Real Estate Development Financing

Certificates with this course
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