Definition
Joint ventures partner multiple parties to acquire and operate property jointly. They combine strengths while spreading risk.
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JVs combine strengths of multiple parties (capital, expertise, networks). Structure varies from equal partnerships to designated GP/LP roles. Profit sharing negotiated by parties. Common with institutional investors and operators. Requires clear governance and decision-making. Conflicts possible if parties disagree. Professional documentation essential. Enables larger deals than individual capacity. Reduces individual risk through shared ownership. Growing strategy for institutional real estate. Requires alignment on strategy and risk tolerance.
Pro Tip
JVs require clear governance. Ensure decision-making authority is documented.
Example
Joint venture between pension fund and experienced operator acquired $50M property.