The Effects Of Equity Capital Investment On Return Attributions For General And Limited Partners In Real Estate.

This research paper is based on real estate financial engineering and is suitable for
alternative investors.
Joint ventures are considered a type of alternative investment and, as such, are suitable
for certain classes of investors, different from traditional stock and bond picking. Given
the thresholds it allows for general partners at different tiers, hedge fund investors and
alternative investors have drawn their attention towards the real estate joint venture
waterfall. In this article, we have several objectives. The first is to talk about why real
estate typically uses the joint venture structure. Then we will look at how to actually
achieve disproportionate returns to reward different parties in projects differently. Then
we’re going to look at how to actually build a cash flow waterfall and promote structure,
which are very common in real estate projects. We’re going to use different hurdle rates
for thresholds for modeling the internal rate of return. We’ll use a three-tiered waterfall
in Excel to build all of this. And finally, we’ll be able to evaluate the general partner and
limited partner rates of return under different scenarios..