Co-GP Investments

NetLeaseX Capital and its co-investors will invest up to 80% of the sponsor’s, or GP, investment. The sponsor will receive a credit for all funds invested in the project to date towards the sponsor’s portion of the GP investment. In addition, the sponsor will be required to guarantee repayment of the senior debt and be liable for any nonrecourse carveouts, environmental indemnities and/or completion guaranties.

By maximizing project leverage, sponsors can scale their platforms and assets under management. In addition to providing co-GP capital, we’re able to access preferred equity and/or senior debt financing for your projects as well.

Our Co-GP Investment Structure

• Investment Amount: $500,000 minimum, no maximum
• Investment Structure: Preferred membership interest in the ownership entity
• Preferred Return: 10% per annum, cumulative from investment date
• GP Contribution: Approximately 20% of the total equity investment for which the sponsor receives the same 10% preferred return as the other members in the LLC and is in a first loss position relative to the preferred equity and co-GP’s interests.
• Common Interests: The co-GP investor will receive a proportional percentage of the sponsor’s common membership interest in the development entity for a nominal amount, as consideration for their co-GP investment in the sponsor’s project. For example, if the GP investors would own 50% of the common membership interest and the co-GP investor invests 50% of the total GP investment, the co-GP investor will own 25% of the common membership interest in the project. In addition, the co-GP investor will receive a proportional amount of any fees and costs authorized to be paid to the sponsor in the project, though this proportion is typically negotiated to be lower than their equity contribution percentage to reflect the sponsor’s “sweat equity” in sourcing, managing, and executing the deal.
• Leverage: Low cost first mortgage debt from a third party lender is needed. Ideal leverage is 60 to 70%. We can arrange the senior debt at a very competitive rate and terms if you need help in doing so.
• Development Entity Distributions: Net cash flow from the operation and resale of the project will be applied in the following priority:

a. Pay debt service on any project-related loans;

b. Pay 10% per annum cumulative preferred return to the preferred equity investor;

c. Redeem the preferred equity investor’s Class A preferred membership investment;

d. Pay 10% per annum cumulative preferred return to the co-GP investor;

e. Redeem the co-GP’s Class B preferred membership investment;

f. Pay 10% per annum cumulative preferred return to the sponsor;

g. Redeem the sponsor’s Class C preferred membership investment, and

h. After all of the preferred membership interests have been redeemed (and all cumulative preferred returns have been paid), all remaining cash flow from the operation and resale of the project will be distributed to the preferred equity investor, co-GP investor and the sponsor as the holders of the common membership interests.

• Term of Investment: Maximum 5 years
• Product Types: All real estate types, including land
• Market: Nationwide
• Decision Making: Major decisions (e.g. termination of manager, sale, or refinance) require the preferred equity investor’s approval. Co-GP investors typically negotiate approval or consultation rights at least equivalent to those granted to the preferred equity investor.
• Senior Loan Recourse: The sponsor will be solely responsible for submitting financial statements and any necessary loan recourse and personal guarantees to the senior lender.
• Preferred Investment Recourse: Non-recourse, except for standard carve-outs. A completion guaranty may be required on development or rehab projects.
• Closing: Typically, 4 weeks. However, as fast as 10 days from the date of receipt of all requested due diligence items

Typical Co-GP Deal Profiles

• Value-Add Multifamily: Properties requiring significant renovation or repositioning
• Ground-Up Development: New construction projects with strong market fundamentals
• Opportunistic Investments: Properties requiring significant operational turnaround or repositioning
• Industrial/Logistics Facilities: Strategically located distribution or manufacturing centers
• Medical Office Buildings: Healthcare facilities with strong tenant profiles

Partner With NetLeaseX Capital

Ready to scale your real estate platform with co-GP capital? Contact Ron Zimmerman at (513) 621-1031, via online chat on this website, or email us with your project summary at ronz@netleasex.com. You can also review our Due Diligence Submission List and Underwriting Loan Guidelines for various property types.

In a market characterized by capital constraints and evolving investor demands, our co-GP structure offers a strategic advantage. By partnering with NetLeaseX Capital, you gain access to flexible capital solutions, risk-sharing capabilities, and the ability to pursue larger or more complex projects than your internal resources might otherwise allow.