Fund Formation

Fund Formation

Overview

We represent both promoters and investors in the formation of various large and intricate real estate fund entities.

A prime example is our recent representation of an established promoter in the formation and financing of its twelfth real estate investment fund providing for investor capitalization in excess of $900 million.

As the fund’s principal investors are university endowment funds and foundations, which have different tax concerns, there was a need to form a sub-tier private REIT through which the real estate investments are made. The fund is structured as a limited partnership with a separate limited partnership serving as the general partner and with the ultimate general partner being a single purpose limited liability company. Project development, property management and brokerage services are being provided by affiliated entities of the general partner.

In conjunction with the formation of the fund, we negotiated the documentation relating to a revolving credit facility for the fund. This credit facility is a syndicated financing in the potential amount of $450 million, incorporating both a subscription line financing and a pledged equity financing of sub-tier real estate holding entities.

This fund formation and financing demonstrates the close collaboration at Schiff Hardin among our real estate, securities, tax and ERISA attorneys — a collaboration required for efficiently and successfully completing such transactions.