Key Takeaways
- Multi-party negotiations are the norm in professional real estate—manage interdependencies between all deal participants.
- Lender term sheet optimization can improve IRR by 1-2 percentage points—as impactful as a significant purchase price reduction.
- Government incentives create value but attach compliance obligations—budget for compliance costs and negotiate achievable requirements.
- Distressed acquisitions create outsized returns when all parties receive better outcomes than the foreclosure alternative.
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Test Your Knowledge
1.What is the typical preferred return in a real estate syndication?
2.Why should you solicit multiple lender term sheets simultaneously rather than sequentially?
3.What is the "but-for" test in government incentive applications?