Structuring, Negotiating and Managing Partnerships in Property
Julian R. Sterling
These are the companion files of Real Estate Joint Ventures by Julian R. Sterling.The book on Amazon →
The four Excel workbooks that go with the book, corrected where it was wrong: the waterfall of
Chapter 9 as a live engine, now with every other chapter’s arithmetic beside it; the complete venture of Chapter 23 end to end;
the remedies of Chapters 7, 8, 11 and 19; and the term sheet checklist, the major decisions table and the diligence questions. Around
them: the same models with the inputs emptied, thirteen working documents to print, forty questions that mark themselves, and three cases
the book names and never takes to a number. Every numeric workbook ends with a checks sheet that closes ALL OK.
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Twelve workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 23 September 2026.
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Chapters 9, 10, 6, 12, 13, 17 and 20 to 22 · Appendix C
The waterfall, the promote, and what it costs
Nine cells define the deal and five tiers resolve below them. Set the exit proceeds to 150 and the
promote is 1.53 (the book, rounding first, prints 1.54); set them to 320 and it is 54.43. Between those two the venture’s proceeds slightly
more than double and the promote rises thirty-five-fold — the convexity of Chapter 10, easier
to believe once you have made it happen yourself. The catch-up is solved in the cell rather than
asserted, so changing the split from 50/50 to a full catch-up simply produces the right answer. Separate
sheets carry the other two appendix structures, the promote-by-exit-year comparison that shows a
multiple-based waterfall paying 27.64 whether the exit is in year three or year ten, the leverage table
— sixty per cent more promote on thirty-seven per cent less equity — and the investor’s
return computed with the promote and without it, which Chapter 10 says an investment committee wants
and rarely receives. A final sheet is the same engine with the book’s numbers stripped out, for a
deal of your own. New: a sheet that recomputes the other chapters’ arithmetic, which nothing reproduced
before — the leverage table of Chapter 6, the fee bases and the sponsor’s total economics of
Chapter 12, the promote grid of Chapter 13, the buy-sell, the rescue, the retention and the lookback. In
Chapter 12’s bad case the sponsor takes out 3.16 times its capital, not the “1.5x” the book
prints, which is its fees alone; across Chapter 13’s grid the investor’s net return falls 28 per cent
while the promote falls 42, the reverse of what the chapter says.
Chapter 23 opens by saying that a reader with a spreadsheet should be able to rebuild the deal
from the chapter alone. This is that spreadsheet: sources and uses at closing, five years of operations,
the capital account rolled forward at 8% on capital plus accrued, the refinancing and the deemed
liquidation at a valuation of 126 — revised: the chapter runs it after the 2.00 advance has left, and
finds nothing; run first, it finds 1.50 above capital and the preferred return and a promote of 0.75, still
well short of the advance — the exit waterfall with the
14% hurdle solved in the cell — it needs the year-five receipt of 71.54, and sizing that tier as
“80% of what is left” is where hand-built models go wrong — the lookback, and the
returns by partner. The chapter prints interest and the asset management fee as a single line; the
workbook splits them, and the split reproduces all five printed figures and the 3.60 of total fees. A
downside sheet runs the venture at any exit price and finds the one at which the promote first becomes
payable at all. It is 122.68, and it appears nowhere in the term sheet. And the sponsor’s regret about the
catch-up is priced: at this exit a full catch-up would have added nothing, while the 70/30 tier it traded
for paid 0.58.
Failure to fund, the clawback, and what removal costs
Chapter 8 ends by telling you to model the remedy before you sign it. This does that for all four
dilution families at once: a sponsor at 10% that misses a 2.00 call ends at 7.14%, 7.04%, 2.99% or 1.52%
depending on which formula the agreement contains — and two of those four are both described in
term sheets as “dilution at 1.5 times”. Beside each, the promote, unchanged by any of them,
which is why an investor that dilutes without touching the promote has barely moved the sponsor’s
economics. Then the default loan and its accretion, the deferred buyout that turns a 75% price into 56%
of fair value, the worked clawback of Chapter 11 with the tax rate as an editable cell — at
40% the sponsor finishes at 1.52x against the investor’s 1.22x on a deal that produced almost no
profit — and the five removal variants of Chapter 19, with what the sponsor’s capital interest
becomes if the promote it gives up is shared pro rata (22.99 rather than 21.66), which the chapter’s
table silently rules out. New: the sources and uses of Chapter 7, the cost of calling early and the
equalization of a late partner.
The term sheet checklist and the diligence questions
Appendix B’s sixty-four questions as a working checklist, with a status against each and a
column for who benefits if a question stays open — the column that earns its keep, because a term
sheet leaving more than a handful open will be renegotiated, and renegotiation after signing is where
relationships are spent. Appendix D’s major decisions table with both opening positions and a
column for where you landed. And Appendix E’s twenty-five diligence questions with a column for
how each was received, which is often more informative than the answer.
The four workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 7 to 11, 19 and 23 · Appendices B to E
Your waterfall, your venture, your remedies
The waterfall and its three appendix structures, the complete venture, the remedies and the checklist, with the same formulas and every blue cell emptied. The exit values, exit years and price ladders down the side of the tables are steps, not data, and stay.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: 33.43 of promote at 250, 15.0 per cent to the investor in Chapter 23, a sponsor at 2.99 per cent after a 1.5x reduction.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 3 to 20 · Appendices B, D and E
Thirteen working documents
The term sheet read for what it decides, with each side’s opening position and the absences to look for. Appendix B’s checklist on two pages, with a column for who benefits if a question stays open. The three-way race: the timetable and the conditions precedent. Sources and uses, the capital call notice and the overrun. The remedy, modelled before you sign it. The waterfall written as definitions, and the eight tests that prove a model. Interim promote, the clawback and the lookback. Every payment to the sponsor and its affiliates. Major decisions and where you landed. Removal and the morning after. The quarterly report and the distribution notice. Diligence on your partner.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Five on setting up the deal, seven on capital and funding, eight on the waterfall and the promote, seven on the clawback, fees and the model, seven from governance to the complete venture, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapter 11 · Case one
The lookback, measured two ways
Chapter 11 defines the lookback as the whole life run “as a single set of cash flows”, then adds up amounts owed in year seven and paid in year three, and finds no promote earned. On dated flows the partners earned 9.92 per cent before promote. A lookback measured that way allows 5.36 of the 12.00 and repays 6.64. Same venture, same words; the measure is worth 45 per cent of the clawback.
Chapter 6 · Case two
Preferred equity in the stack
The chapter’s asset with a 50 per cent senior loan and 15 of preferred equity at 6 per cent cash and 5 per cent accruing (ADDED). The common returns 13.48 per cent, the promote is 2.22. Income can fall 43 per cent before the hard pay is missed and the holder can take control; below a sale at 69.14 it is not repaid. The layer helps the common only while its all-in cost stays under about 13.3 per cent.
Chapter 12 · Case three
The offset shaped backwards
Transaction fees offset against the promote recover 1.53 of 4.75 in Chapter 12’s bad case, and all of them in the good one. Offset against the asset management fee instead, they give the investor 2.14 at 150 against 1.38. The two cross at net proceeds of 151.68: below it the fee offset protects, above it the promote offset pays.
the last sheet of every numeric workbook: each line states its own verdict, and the file ends ALL OK
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
On the checks sheets
Of the 140 figures the first workbook now tests, 121 reproduce exactly and 3 are marked
“revised”, with the corrected figure beside the book’s. Sixteen differ in the second decimal: ten are cells of
the Chapter 13 grid, whose base yield, income and growth the book does not print, and the rest come from the
book rounding as it goes. They are marked “rounding” rather than quietly folded into
“reproduced”, and the sheet says why: the book rounds an intermediate figure and carries the
rounded number forward, while the workbooks carry full precision and round only for display.
Chapter 9 and Appendix C disagree with each other in the same way. The chapter prints the
catch-up as 31.28 and the appendix as 31.29; the exact value is 31.2885. Tiers four and five inherit a
hundredth each and both tables still total 250.00, because the last tier absorbs it. Nothing turns on any
of it — it is shown because a check that widens its own tolerance until everything passes is not a
check.
Go beyond the companion files
Real Estate Joint Ventures develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF
prints on A4 or US Letter. They use no macros and
no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to update links on
opening, decline — there are none.
The book these files come from
Real Estate Joint Ventures by Julian R. Sterling. The workbooks reproduce the worked examples in the
chapters; the book is where the reasoning behind them is set out.
What changed, and when
23 Sep 2026
The four workbooks corrected; each numeric one now ends ALL OK. Chapter 23’s deemed liquidation at 126, run before the 2.00 advance, finds a promote of 0.75, not nil; at its exit a full catch-up would have added nothing (the book says more than twice 1.74). New sheet for Chapters 6, 10, 12, 13, 17 and 20 to 22: the sponsor’s bad case is 3.16 times its capital, not 1.5x; the investor falls 28 per cent across the Chapter 13 grid, not more than the promote’s 42. Appendix B has 64 questions. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
How is a JV buy-sell price calculated?Run the waterfall on a deemed sale at the stated value. At 140 against a 60 loan, a 10 per cent sponsor stake prices at 9.57, not the 7.79 pro rata implies.
What does it cost to remove a JV sponsor?Run the waterfall at the appraised value: removal without cause pays a 10 per cent sponsor 24.89, for cause between 16.36 and 11.56, depending on the clause.
How do you value a JV promote before the exit?Weight the waterfall over exit scenarios: the promote is 3.41 at the base case but 5.08 expected, worth 2.52 today at 15% on a 100.0 venture.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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