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
On
Robert J. Ivanhoe answered:
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.
On
Korosh Farazad answered:
On average, 30 percent to 40 percent equity contribution.