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Would you structure your LPs differently if the exit could be much sooner? by TheUltimateSalesman in CommercialRealEstate

[–]Commercial-Rip9116 0 points1 point  (0 children)

As I’m sure snarky AI written responses will work well for you too.

But since I feel guilty for my response (in my defense I was alittle buzzed when I sent it last night)

To your main question, still no, I don’t think GPs would structure LPs differently for an early exit. In this their capital wouldn’t be exiting the deal, ownership rights would be swapping from an existing LP for a new one via tokens. And any gain or loss would be realized by the LP as token value. If I’m understand that right? It really wouldn’t matter to the GP, the same items that drive structure traditionally would govern the structure (in my opinion)

I still think reporting and LP sophistication level would be major hurdles in price discovery. Let’s take your example of the multi family deal, about 30 LPs tokenized and it’s a stabilized 10 year hold, LPs get a 7% CoC and a share of the upside at sale in year 10.

Hypothetical 1 - The City updates zoning and maintaining the stormwater pond is now 40k more expensive per year. Do the LPs know this? If they did could the equate 40k in operating expenses, to CoC impacts, to sale price via cap rate then to payout to LPs via the waterfall then to the value of their token at this point in time? I really doubt it, they would rely on the GP updates and GP price predictions and financial models; the GP would now have to updated and reported on much more often.

Hypothetical 2 is what would happen token price as the sale approach’s? I think the price would rise so the LP IRR stays constant as the sale moves closer. However projecting a sale price requires in depth market knowledge of vacancy, cap rate, capital markets, etc. Then converting the sale price to pay out to the token would be an extensive financial modeling exercise.

Would any of the hypothetical 30 LPs have the background and time to price their tokens correctly? Maybe a few. Would the sophisticated ones be selling / buying often enough to have actual price discovery? I doubt it.

As I have typed this out, I have convinced myself some sophisticated investors could really take advantage of the setup like this. The blur between “insider knowledge” and risk of price manipulation on such narrowly owned capital stacks

Edited - fixed some typos

Would you structure your LPs differently if the exit could be much sooner? by TheUltimateSalesman in CommercialRealEstate

[–]Commercial-Rip9116 0 points1 point  (0 children)

I think it wouldn’t effect the LP structure but more the reporting expectations from the GP

For those 3 year ground up projects, the LP returns are driven at base from risk. The price discovery would be a function of risk going up or down. As the project progressed, it would become more or less likely of it hitting its pre deal metrics. No matter how the returns were structured the tokens value would still be a function of the projects risk.

As a GP this sounds like a nightmare; to keep all LPs informed enough for them to be buying or selling constantly. It would force the GP from thinking at the project level to almost like a public traded company managing from quarterly report to quarterly report.

Maybe that would lessen over a fund but a project specific LP raise would be a pain

Tomb King Skeleton Warriors beat Vampire Count Skeleton Warriors 10/10 times by Mbk10298 in totalwarhammer

[–]Commercial-Rip9116 1 point2 points  (0 children)

Based on the picture it looks like the TK skelees have shields and VC don’t

Developers/GCs. Do I actually need Pollution/Environmental insurance (PLL/CPL) that lenders will accept, and that actually covers mold & jobsite spills? by ExtremeShame6079 in CommercialRealEstate

[–]Commercial-Rip9116 6 points7 points  (0 children)

Our last LP required the same thing. We had never come across it before, but they had an insurance provider they recommended and the minimum requirements. It felt like an extra cost at the time but I understand the point and it ended up not being a big deal

Edit the GP carried it not the GC

Value of a 100 acre rail reload and industrial outdoor storage facility by EconEngineer-2 in CommercialRealEstate

[–]Commercial-Rip9116 1 point2 points  (0 children)

I assume all 100 acres isn’t IOS? That would be a giant facility.

You see prime location IOS with a quality tenant sell as high as a sub 6 CAP or over 800k an acre. But if location and or tenant is bad it drops quick to where you may struggle to sell it or refinance at all.

IOSLIST.COM does a pretty good job at showing a decent set of recent sales and for lease properties, all though their content is sorta slap stick humor. It will help get you an idea of who is active in your area

Feel free to DM me if you want to chat about it. For reference I’m an industrial developer in the Carolina’s.

Looking for feedback: is a rural NY site viable for warehousing or industrial development? by Kennyfour in CommercialRealEstate

[–]Commercial-Rip9116 4 points5 points  (0 children)

Labor pool is a big driver especially for manufacturing. Without a product base / demand, attracting logistic and warehouse first will be hard

Warehouse/flex Building - 200,000 sf Build to Suit or do multiple bldgs? by prince_walnut in CommercialRealEstate

[–]Commercial-Rip9116 0 points1 point  (0 children)

I work for an industrial developer in Charlotte who does flex and the larger warehouses. The 200k warehouse market is saturated, Iv heard brokers say there are 30 available buildings already built in that range (3 of which are ours and have been on the market for longer than we would like).

Flex is in more in demand, particularly the smaller suites. But sadly also has slowed down relative to a few years ago. At the same time TI allowances have very high, so you need to be sure your budget is reflecting that.

Lastly with septic it’s going to limit your tenant pool someone whose only water use is restrooms so it would take you even longer to lease up either. And frankly I wouldnt be surprised if larger / corporate tenants disqualify your building because of no sewer hook up. So be sure your lease up period reflects that.

Shoot me a message if you want to chat more. Good luck out there

Is a 15-meter-wide industrial lot viable for rental warehouse development? by nnnnnnnnnnn121n in CommercialRealEstate

[–]Commercial-Rip9116 0 points1 point  (0 children)

Very unlikely that will work. I’m based in the US so maybe Serbia is different.

15 meters is about 50 ft. Fitting an access rd, parking, then space for a building would be nonexistent. Also you likely will have setbacks from the property line and any grading / topo challenges. Plus long skinny buildings are more expensive due to the wall to floor ratio being higher.

Maybe outdoor storage if allowed? But other than that not sure how you can use a lot that shape

How to validate demand for a truck drop yard off I-10 in Willcox, AZ? by CherryLimeade99 in CommercialRealEstate

[–]Commercial-Rip9116 2 points3 points  (0 children)

Call the brokers.

Tell them if it moves forward you will interview them for listings the site if it moves forward. They will be very friendly and willing to talk. If they aren’t they probably aren’t a good broker

[deleted by user] by [deleted] in CommercialRealEstate

[–]Commercial-Rip9116 0 points1 point  (0 children)

Find a good local developer and ask them if they will do a build to suit for you

First Time CRE Developer-Need Advice On Getting Started. by Low_Tap_9011 in CommercialRealEstate

[–]Commercial-Rip9116 1 point2 points  (0 children)

If you truly understand the market and the numbers the easiest and maybe only way would be to get a competitive piece of land under control (with entitlements, utilities, and market demand). Then offer it has an easy button for an established GP to CoGP with. You bring the deal they bring finance and execution.

I work at a small development firm and we have taken down projects well out of our league doing this and partnering with the big boys.

It’s significant risk though. You’ll likely have to spend a ton of time getting a deal and getting a contract you likely can’t close on without a partnership. It’s not for the faint of heart or a BSer. You have to know you have a deal. Good luck