LSI 2010 Real Estate Joint Ventures conference materials.pdf

Gregory K. Johnson of Wright Runstad & Company
Preston R. Sargent of Kennedy Associates Real Estate Counsel, LP
Speaker 5: 12
Speaker 6: 12
10. Do Create Deal Summary/Abstract
• During or immediately after closing by deal person
9. Don’t Waste Time/Words/Money on 1% Probability Stuff
• Simple straight-forward resolutions
8. Do Take Time to Run Through “What Ifs”
• Be expansive/out of the box
• Market conditions change
• Institutional investor will not view new factors your way
7. Find an Investor who is Committed to Your Type of Deal
• More prone to work things out or see them through
• Deal needs investors attention
6. Do Insist on Appropriate “Shoot Out” Provision
• Ultimate dispute resolution tool
• Makes “divorce” less cumbersome/costly
• Protect yourself with adequate notice and process beforehand
23
5. Don’t Limit to Arbitration/Mediation in Development Deals
• Limited discovery rights
• Too many parties… cumbersome
4. Do Insist in a Reasonable Judgment Standard
• Circumstances evolve… conflicts arise
• Limits arbitrary actions
3. Don’t Limit your Control at the Exit
• Look for lock-out periods
• ROFR’s preferred… ROFO’s always
2. Do Choose a Jurisdiction for Disputes
• Make sure its your own
1. Don’t “Marry” Someone You Don’t Love/Trust
• No such thing as a “good deal with a bad investor”
• With good investor you don’t need any JV Agreement
• With bad investor you’ll have to fight to get what’s in the JV Agreement
24
Law Seminars International | Real Estate Joint Ventures and Funds | 02/08/10 in Seattle, WA