A joint venture is a contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise. Investors tend to seek partners who can create value in ways they can’t on their own. Creation of value can come in many ways, such as the identification of off-market transactions that are purchased at attractive prices, the rehabilitation of an asset, more effective management of a property, or ground up development of an asset.

 

Joint Venture is similar to a partnership, in that it must be created by agreement between the parties to share in the losses and profits of the venture.  It is unlike a partnership in that the venture is limited to a single specific project, rather than for a continuing business relationship.  Structured Joint-Venture Financing can be complicated and is not appropriate for all projects.  However, some projects make more sense when the lender becomes an investor, taking on more of the risk in exchange for higher potential profit. 

 

When appropriate GDCLB can advise our clients appropriately and match the right JV lender/partner to the project.