Real Estate Funds
Our Real Estate Funds practice combines the sophistication of our renowned real estate practice with decades of experience in the investment fund industry.
This rare mixture allows us to provide sponsors of real estate-related private equity funds and hedge funds with advice on every aspect of their structures, operations and investment transactions.
The real estate funds we form often have unique mandates. Some are permitted to invest only in certain geographic regions (domestic or international). In other cases, asset class restrictions pertain, such as investments limited to residential real property, development of medical office buildings, making of first and second mortgage loans and/or mezzanine loans and owning and improving vineyards in certain regions.
In each case we help the client explore the flexibility it needs to allow for diversification and changes in market conditions, while anticipating the targeted needs and expectations of the fund’s investors.
We prepare private placement memoranda, subscription agreements and partnership/operating agreements, and work extensively on structuring our clients’ management company arrangements and compensation plans.
In some cases, larger investors require special deals, whether they relate to economics, oversight or key-man concepts. We analyze investor requests and draft and negotiate side letters to memorialize the agreements reached. We also provide day-to-day practical guidance on fund terms, subscription lines of credit, governance issues, securities law compliance, blue sky filings and ERISA.
We have substantial experience in representing funds in the purchase, sale and financing of a wide array of real estate-related assets including distressed residential properties, medical office buildings, commercial office buildings, distressed and performing mortgage and mezzanine loans as well as real estate structured products and derivatives. We have also represented funds in the issuance of mortgage and mezzanine debt instruments.
We structure debt and equity investments for our clients, including first and second mortgages, mezzanine loans, preferred equity and hybrid structures. We deal frequently with joint venture structures representing either the financing partner or the operating partner. We also implement successful exit strategies for our clients’ investment positions, including tax structuring.
Regulatory & Compliance
We help our clients assess and comply with their obligations to register as investment advisers, commodity pool operators and commodity trading advisers, including preparing SEC, CFTC, NFA and state-required registration materials and filings as well as claiming exemptions from registration where possible.
We work to maximize tax efficiency throughout the formation and life of each fund, considering location, the nature and exit strategy of the investment portfolio and specific investments, issues affecting specific types of investors (such as U.S. tax-exempt and non-U.S. investors) and other factors. We have experience with a wide range of tax structures, such as blocker corporations and private REITs, to address or minimize the tax and fiduciary effects on certain classes of investments.
As with any new investment, we advise on the tax, estate planning and creditor protection opportunities available to clients when structuring their interests in a fund. Our trusts and estates attorneys have considerable experience helping fund managers assess their planning options and implement their choices.