Monday, January 04, 2010

Real Estate PE

Real Estate Transactions:
Structured debt from capital market vs. equity.
• 0-50% - stable (5%)
Blended cost of capital 8%

P/E that talk through how to structure investments
- Joe Pagliare structured transactions
- Direct Property Manager (Developer): Block and tackling, relationships with leasing brokers, investment sales brokers, hands on in the community, elected officials.
- Investment: Private source of capital for developers, providing additional equity, structure transactions, leveraging cheapest capital market.
Blackstone – Associate level, same training as traditional P/E group.
Real estate group of investment bank (i.e. Goldman Saks –Associate (Bulge Bracket Firms)). Investment specialists, Whitehall Funds, competitors of real estate P/E. Lower liquidity profile. “production machines”.
Warnodle, Equity Office, DDR, Simon Properties (REIT) - build and open office properties. (Offers more focused specialized knowledge of market in which you operate).
Value is provided with the equity.
Good fits: Property types.
Urban Economics


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