ATLANTA—Joint venture developments—and redevelopments—gained momentum in the post-recession commercial real estate world. But how can you make sure you’re picking the right partner?
GlobeSt.com caught up with Gary Saykaly, director of Franklin Street’s Atlanta office, to get his take on that topic in part three of this exclusive interview. You can still check out part one, Three Retail Real Estate Trends for 2015, and part two, Why Shopping Centers are So Hard to Find.
GlobeSt.com: Are you seeing an uptick in the number joint ventures forming to build in the retail sector?
Saykaly: There are more than 300 active joint venture/equity capital investors looking for opportunities in the retail space with qualified operators or developers via a variety of structures. As we track new joint venture arrangements, we continue to see new joint venture/equity capitals sources emerge that were not in the retail space previously. Each of these joint venture-equity capital sources has its own unique risk-return parameters, preferred return requirements and desired deal structure.
GlobeSt.com: In terms of retail development or redevelopment, how can a company ensure it is partnering with the right joint venture/equity partner?
Saykaly: The biggest mistake we have seen are retail developers engaging a joint venture/equity capital partner too quickly and ending up with a partner that is not ideal given the needs of the developer and risk-return characteristics of the project. When working with developers, we first determine the needs and objectives of the developer, their value-add contribution, the level of deal control, and the risk-return profile and unique characteristics of the project. With this insight and our access to a deep pool of joint venture-equity partners, we are then better able to find a capital source whose structure, return requirements, objectives, and control requirements line up with the developer.