JOINT VENTURE

A Joint Venture (often abbreviated JV) is an entity formed between two or more parties to undertake a project together. The parties agree to create a new entity by both contributing equity or experience, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or a continuing business relationship such as the Sony Ericsson joint venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.

Construction Lending Group can obtain joint venture equity for qualified residential developers and commercial property owners in transactions where there is a significant opportunity for value and/or cash flow enhancement. After return of equity and minimum preferred return thereon, additional profits will be distributed in accordance with an agreed waterfall structure and developer "promote." Alternatively, where the owner prefers to limit the lenders participation in the upside, a Preferred Equity structure can be used whereby the lender receives a higher preferred return in exchange for a limited profit participation.

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