Real Estate Ventures
Subtitle: Formulating and Interpreting Promote Hurdles and Distribution Splits
Publisher: American Bar Association
Published: 2017
Language: eng
Number of pages: 553
ISBN-13: 9781634253345
Subjects: Real estate investment
Description: "[This book] addresses the difference between IRRs and preferred returns in real estate ventures. [The author] explains, compares and quantifies different approaches commonly taken when formulating and interpreting how distributions are shared by a financial partner and an operating partner (when the operating partner is entitled to a 'promote' or 'carried interest' after a certain level of distributions) including: the differences between IRRs and preferred returns; allowing the promote hurdle balance to go negative when there is a surplus vs. not doing so; in effect, using continuous compounding vs. discrete compounding with simple returns between compounding; when discrete compounding is used, employing separate compounding periods for each cash flow vs. using fixed compounding periods for all cash flows; and using timing conventions, such as, assuming all cash flows occur at the beginning or end of a period."--