In trying times like these, we rely on the strength of our close relationships to thrive.
This is no different for real estate investors who are relying on operating partners of their platforms.
Sad though it may be, the reality is that those relationships are not always as harmonious as partners originally intended, so they need to provide for an appropriate parting of ways when all else has failed.
This briefing examines some of the “For Cause” and “Without Cause” break-up scenarios provided for under programmatic joint venture documents and the consequences that can flow from them.
There is a tension between the capital partner’s desire to protect its investment and, accordingly, set out relatively strict default parameters and the operating partner’s desire to have adequate delegation of authority to the manager and not risk hair triggers of default