Topic
JVs, waterfalls, and the mechanics of putting deals together.
For years, deal teams swore by Excel because every alternative was rigid, slow, or wrong. That excuse is expiring. A new generation of underwriting tools is fast, auditable, and — crucially — collaborative. From Artifact to System The shift is from the model as a one-off…
Inclusionary zoning requires a share of new units to be affordable. The politics are intuitive; the economics are unforgiving, and getting the ratio wrong stops production entirely. The Feasibility Cliff Set the affordability requirement too high and developers simply do not…
It almost always takes a stack, not a single source: LIHTC equity, soft debt from the jurisdiction, a density bonus to add market-rate units that cross-subsidize, and increasingly a conversion or land contribution to reset basis. The single biggest lever, though, is time. Every month of entitlement delay is carrying…
Many of today's emerging managers are not raising a fund at all. They are running a co-invest club — a recurring group of LPs who see each deal and opt in — and calling it a track record. Design for Graduation The trick is to structure the club so co-investors can graduate into…
The distribution waterfall is where the money is decided, and it is written in language designed to intimidate. Strip the jargon and it is just a set of priority rules for who gets paid in what order. Return of Capital, Pref, Promote First, investors get their money back. Then…
Commercial Property Assessed Clean Energy financing was, for years, a clever structure most lenders refused to touch. The consent process has matured, and C-PACE is now a real line in the capital stack. When It Pencils It works when your energy scope is a meaningful share of…
Anyone can design a waterfall that feels fair when a deal triples. The test is the structure that still aligns everyone when the deal merely survives. Clawbacks and Catch-Ups A well-built waterfall has a clawback so early promote does not outrun final results, and a catch-up…
Layering mezzanine or preferred capital onto senior debt means negotiating an intercreditor agreement — a document few read closely until something goes wrong, at which point it is the only document that matters. Cure Rights and Control The provisions worth fighting over are…
When deals routinely cleared high hurdles, promote was an afterthought. With returns compressed, the promote structure is once again a live negotiation between sponsors and LPs. Lower Hurdles, Tighter Tiers LPs are pushing for higher preferred returns before any promote, and…
Joint-venture agreements are won and lost in the control provisions — the major-decision rights, removal triggers, and deadlock mechanisms that nobody thinks about until they need them. Major Decisions and Deadlocks Define which decisions require partner consent and what happens…
As senior lenders cut leverage, the gap between the loan and the equity widened — and preferred equity rushed in to fill it. It is one of the defining structures of this market. Debt-Like, Equity-Adjacent Preferred equity sits above common equity and below the senior loan,…
Every experienced sponsor has a first deal they would underwrite very differently today. The lessons are remarkably consistent across people who have nothing else in common. Reserves, Partners, Patience You will need more reserves than you modeled, your partners matter more than…
The single most controllable lever on multifamily NOI is renewal pricing, and it is also where operators are least disciplined. The gap between best and median practice is enormous. Govern the Algorithm Revenue-management systems can optimize renewals, but ungoverned they drive…
Start with your senior lender's intercreditor posture, because it often makes the decision for you — many seniors will tolerate pref equity but fight a mezz loan that creates a second lien. Beyond that: mezz is debt with a fixed maturity and foreclosure remedy; pref has no maturity but harder control terms on default.…
Read more →C-PACE pencils when three things line up: your senior is one of the (growing but still short) list of lenders with a standard consent process, your energy scope is genuinely 15%+ of project cost, and you can hold through the assessment's prepayment window. On a $14M conversion, the consent fight is usually two to four…
Read more →