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What are typical capital contribution percentages in deals right now?

We are underwriting the acquisition of a stabilized multifamily asset and have no plans to further develop. We're in talks with a placement agent to source capital overseas to invest the larger portion of the equity. What are market-rate capital contribution percentages among JV deals with foreign institutional investors?

Answers
  • Korosh Farazad
    Farazad Investments
    May 23, 2018

    On average, 30 percent to 40 percent equity contribution.

  • Robert J. Ivanhoe
    Greenberg Traurig, LLP
    June 09, 2018

    This can vary, but usually 90/10, give or take a bit (from 5 percent to 20 percent from the U.S. sponsor), unless the non-U.S. investor is looking to take advantage of certain benefits to FIRPTA and invest in a domestically controlled REIT, which would require 51 percent on the U.S. side of the equation.

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