Real Estate: Structures and Analytics Service Sheet

Our team has earned a reputation as an industry leading problem solver for complex real estate investment structures. Our unparalleled financial modeling expertise has served some of the largest investment companies in the United States and globally to streamline transaction processes, assure confidence in complex deal underwriting, and significantly improve on-going operations and reporting.

Solutions and Capabilities

Joint Venture Waterfalls

Distribution computations for LP, GP and/or manager
Dynamic modeling for financial reporting purposes on a hypothetical liquidation basis
Review of draft JV agreement financial terms to ensure clarity and precision
Incorporation of various concepts such as catch-ups, promote crystallization, reverse waterfall, etc.
Programmatic JV models including multiple deals with claw-backs
Entity-level valuation in complex ownership structures

Private Equity Fund Models

European- and American-style funds
Hybrid-style funds with claw-backs
Closed- and open-end funds
Fund return projections for capital raising purposes, including gross and net returns accounting for JV level promotes, asset management fees, fund expenses, fund-level carried interest, federal and state/local taxes, and withholding taxes for foreign investors (in collaboration with FTI Consulting’s or client’s tax team)
Preparation or validation of the performance track record of the fund manager with a report summarizing procedures performed and the results of those procedures

Fund Administration Support

Computation of complex incentive fee structure models that cannot be automated in Enterprise Resource Planning systems (Yardi, MRI, etc.) for re-integration back to the systems
Investment performance reporting in compliance with applicable reporting standards (e.g., NCREIF, GIPS)

Transaction Models

Mergers, portfolio acquisitions/recapitalizations, IPOs, carveouts/spin-offs
Robust/efficient modeling with advanced data management technology
Waterfall model integration with property level projection models (Argus and Excel)
Thorough analysis of ownership structure

Operating and Development Platform Valuation

Analysis for internalization/externalization of managers of public REITs and private companies
Platform level EBITDA projections based on underlying property financials and expense carveout/synergy analyses
Robust database supporting comparable multiples/ratios, beta, WACC, DLOM/DLOC
Incorporation of executive compensation recommendations (in collaboration with FTI Consulting's executive compensation team)

Underwriting Model Development and Review

Build-to-suit underwriting model for acquisition of development, value-add, and stabilized real estate projects
Review of client underwriting models for computational accuracy
Review of investor presentations vis-a-vis underwriting models to ensure accuracy
Preparation of report summarizing the results of the procedures performed on the underwriting model

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