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    Real Estate Ventures: Formulating and Interpreting Promote Hurdles and Distribution Splits
    Unavailable
    Real Estate Ventures: Formulating and Interpreting Promote Hurdles and Distribution Splits
    Unavailable
    Real Estate Ventures: Formulating and Interpreting Promote Hurdles and Distribution Splits
    Ebook1,132 pages11 hours

    Real Estate Ventures: Formulating and Interpreting Promote Hurdles and Distribution Splits

    By Stevens A. Carey

    ()

    Currently unavailable

    Currently unavailable

    About this ebook

    Real Estate Ventures addresses the difference between IRRs and preferred returns in real estate ventures. Author Stevens A. Carey 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

    Using timing conventions, such as, assuming all cash flows occur at the beginning or end of a period

    Presented in a straightforward format, the book begins with background on the topic and summarizes the basic issues and concepts related to promote hurdles in four parts:

    Part A: Accessible, question-and-answer presentation of the basic issues and highlights about the topic, including the differences between preferred returns and IRRs

    Part B: Summary of the basic issues and concepts relating to promote hurdles, as well as a more detailed treatment of the differences between preferred returns and IRRs, a discussion of soft hurdles, and of recycling profits, one of the key potential differences between IRR and preferred return/return of capital hurdles

    Part C: General background and analysis of the differences between preferred returns and IRRs

    Part D: In-depth chapters address issues related to "multiple IRRs" and "effective rates," and a practical solution to avoid multiple IRRs in the context of multiple promote hurdles

    LanguageEnglish
    PublisherAmerican Bar Association
    Release dateAug 1, 2017
    ISBN9781634253352
    Unavailable
    Real Estate Ventures: Formulating and Interpreting Promote Hurdles and Distribution Splits

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