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  • February 2018 (Revised December 2019)
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The Tax Man: Taxes in Private Equity Real Estate

By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah F. McCree
  • Format:Print
  • | Language:English
  • | Pages:20
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Abstract

In January 2018, Caelan Langan, an associate at KSW Partners LLC (“KSW”), was asked by Katherine Scott, the partner for whom he worked, to recommend a proposed structure to acquire a prominent office building in San Francisco for their most recent fund. Caelan was asked to review potential acquisition structures that would minimize the impact of taxes on their investors’ returns. The assignment was complicated as KSW had different categories of investors (a sovereign wealth fund, pension funds and high net worth individuals) each of which had different tax considerations. The differing interests created significant potential conflicts in terms of how to manage the investment and when to sell the building, as the economic consequences to each category of investor were not the same. Even the economic interests of KSW were not completely aligned with their investors. The case outlines the alternative investment structures that could be considered: REITs, Limited Partnerships, C Corporations, and combinations of those entities. The case illustrates how to manage the potential conflicts and the important consequences of tax policy on how investments are structured. Students are asked to model the results of alternative investment structures and determine what Caelan’s recommendation should be.

Keywords

Real Estate; Alternative Investment Structures; Property; Acquisition; Private Equity; Investment; Management; Taxation; Policy

Citation

Lietz, Nori Gerardo, Timothy J. Becker, Ricardo Andrade, and Sayiddah F. McCree. "The Tax Man: Taxes in Private Equity Real Estate." Harvard Business School Case 218-077, February 2018. (Revised December 2019.)
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About The Author

Nori Gerardo Lietz

Finance
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Related Work

    • February 2018 (Revised August 2018)
    • Faculty Research

    The Tax Man: Taxes in Private Equity Real Estate

    By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah Fatima McCree
    • November 2018
    • Faculty Research

    The Tax Man: Taxes in Private Equity Real Estate

    By: Nori Gerardo Lietz and Sayiddah Fatima McCree
    • August 2018
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    The Tax Man: Taxes in Private Equity Real Estate

    By: Nori Gerardo Lietz and Sayiddah Fatima McCree
    • August 2018
    • Faculty Research

    The Tax Man: Taxes in Private Equity Real Estate

    By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah Fatima McCree
    • February 2018 (Revised December 2019)
    • Faculty Research

    The Tax Man: Taxes in Private Equity Real Estate

    By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah F. McCree
Related Work
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah Fatima McCree
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz and Sayiddah Fatima McCree
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz and Sayiddah Fatima McCree
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah Fatima McCree
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah F. McCree
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