Co-GP and joint venture deals
Meg's first co-GP deal was a 77-unit residential mixed-use building near downtown Nashville. It had a $9 million capital need and returned a 78% IRR. Her firm has done 12 deals, and five of them used a co-GP structure. In her industrial deal, the partner provides the debt and equity, the developer fee is split, and the LP capital earns a 7% preferred return.
Other pages cover how to split ownership with a money partner, where a preferred return comes first and the money side usually wants at least half of the back end profit. An 8% preferred return pays $80,000 per year on each $1 million invested. One panel video has a sponsor saying 80% of the investors in their deals are single family offices. A guide explains how to structure a Co-GP partnership. Securities counsel should review final terms.
7 videos, 5 questions and 1 guide on this topic.
Guides
- How to Structure a Co-GP PartnershipMost co-GP deals stall because the partners never agreed on who does what.
Videos with summaries and takeaways
- Joint Venture and Co-GP Deals: Case Studies from NashvilleA 77-unit mixed-use building near downtown Nashville was Meg's first co-GP deal, and it returned a 78% IRR.
- Joint Venture and Co-GP Strategies: Case Studies and LessonsA 77 unit mixed-use building near downtown Nashville was Meg's first co-GP deal.
- Joint Venture and Co-GP Deals: Case Studies from a Nashville DeveloperMeg from CA South, a vertically integrated real estate development and investment management firm in Nashville, explains how co-GP partners helped her grow.
- Kevin McGovern on Joint Ventures, Vetting Deals and Global GrowthKevin, chairman and CEO of McGovern Capital, explains how his single family office approaches large deals.
- Co-Investing With Family Offices: Panel on Structures and PartnersA panel of a single family office investor and three deal sponsors explains how co-investment with family offices works in practice.
- Canadian Real Estate Development Co-GP Investor Mandate with ShaneShane is a developer and commercial real estate investor based in Calgary, Alberta.
- Building a Real Estate Fund After the NFL: David of Reed PartnersDavid runs Reed Partners, a real estate firm and fund that buys assets across the country.
Questions answered
- What do capital partners expect from an operating partner?I would say capital partners expect three things from an operating partner.
- How do I structure a JV between a sponsor and capital partner?Start with who does what.
- How do I find a joint venture equity partner?Start by naming your bottleneck, whether that is deal flow, investor access or deal setup.
- How should I split ownership with a money partner?Start with a preferred return for the money partner, then split the back end profit.
- What is a co-GP in real estate?A co-GP in real estate is a second party who shares the management of a deal with the main general partner.
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
- How do I raise money with no track record?I would raise money without a track record by focusing on credibility, relationships, and evidence of my ability to execute.
Tools for this topic
Common questions
What is a co-GP in real estate?
A co-GP is a second party who shares the management of a deal with the main general partner. The role is often limited and is sometimes a 50/50 partnership, depending on what each side brings.
How much does an 8% preferred return pay?
In Meg's example, an 8% preferred return pays $80,000 per year on each $1 million invested.
How many of Meg's deals used a co-GP structure?
Five of her firm's 12 deals used a co-GP structure. Her first co-GP deal, a 77-unit Nashville mixed-use building, returned a 78% IRR.
