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  • November 2018
  • Teaching Note
  • HBS Case Collection

The Tax Man: Taxes in Private Equity Real Estate

By: Nori Gerardo Lietz and Sayiddah Fatima McCree
  • Format:Print
  • | Language:English
  • | Pages:9
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Abstract

Teaching Note for HBS No. 218-077. This teaching note provides the back up analysis for the various alternatives to be considered in choosing the optimal investment structure for the real estate acquisition. It contrasts the interests of the tax exempt investors versus high net worth individuals. It also illustrates how to address the desire for control by the sovereign wealth funds, who have to trade off control for preferential tax status. By working through the related model, the case illustrates the trade off between the desire for a high IRR versus achieving a high Multiple on Invested Capital (MOIC). The case takes into account the effects of the Tax Cuts and Jobs Act enacted on December 22, 2017. The Teaching Note should be read in conjunction with the related Spreadsheet and Answer Key to the case. There are additional case slides which illustrate the results of the Spreadsheet.

Keywords

Real Estate; Alternative Investment Structures; Taxation; Private Equity; Property; Acquisition; Conflict of Interests; Governing Rules, Regulations, and Reforms

Citation

Lietz, Nori Gerardo, and Sayiddah Fatima McCree. "The Tax Man: Taxes in Private Equity Real Estate." Harvard Business School Teaching Note 219-017, November 2018.
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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
Related Work
  • The Tax Man: Taxes in Private Equity Real Estate By: Nori Gerardo Lietz, Timothy J. Becker, Ricardo Andrade and Sayiddah Fatima McCree
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