Real Estate Joint Venture Exit Strategies: Planning for the End at the Beginning; Drafting to Protect Client Interests

One of the most important considerations when forming a commercial real estate JV is how to exit the venture if necessary. Although it may seem counterintuitive and be furthest from the minds of the parties just entering the venture, well-crafted exit strategies are a fundamental part of the JV relationship and are necessary to minimize risk, protect clients' financial interests and assets, and ensure a smooth transition when the time comes to exit the relationship.

Key components of exit strategies include determining the timeline for the exit and identifying triggering events; establishing methods for valuing the JV's assets and parties' interests in the venture; specifying in what manner a party's interests may be disposed (e.g., sale or transfer) and the approval rights of the other parties. Financial and tax implications should also be considered as well as methods of dispute resolution.

Listen as our expert panel provides counsel with key negotiation and drafting considerations when incorporating exit strategies into commercial real estate joint venture agreements and offers best practices to minimize client risk.