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TR U M P STR A TEGI ES FO R R E A L ESTA TE

is especially true if you have a property with retail stores and new,
larger or serious competition is on the way.
You should consider selling real estate when you encounter obsta-
cles to the project, such as denial of zoning or approvals and the pro-
jected critical path of your project is no longer feasible. You should
also consider selling if key relationships or people you rely on drasti-
cally change or leave the picture.

Exit Strategy for Partnership Interests

Partnerships or joint ventures are excellent vehicles for blending di-
verse investing interests into a cohesive business entity. One partner
may put in nothing but money, another may put in both money and
expertise, a third may contribute land. The documentation binding
them together requires careful planning, this is particularly true
when they are not equal partners with equal control.
It is likely at some point in time that the desires of various partners
may not be the same. One may want to sell the property and another
maynot. Thesolutionisa divorce mechanism that is fair and equitable.
Atypical provision often used in two-party partnerships is what is
commonly called the “shotgun clause.” The clause providesthatif
either party wants to sell, he contacts the other party and says, “I want
you to buy me out and here’s what I want for my interest.” The other
party either elects to accept the offer or can elect to sell his share to
theother partyfor the sameamountofmoney properly adjusted for
varying percentage interests. While this provision seems fair, it has
many potential pitfalls. The major one exists when the parties are not
financial equals. The partner with limited funds is at a distinct disad-
vantage. Another disadvantage is the timing may not be right for a
buyout if there are more cash calls imminent that cannot be met.
Another apparent solution is to permit a partner to sell his inter-
est in the partnership after first offering it to the other partners. This

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