Holding companies help reduce a commercial real estate investor’s risk profile and the potential liabilities they could incur as a result of owning an investment property. In order to minimize risk, a holding company isolates one or more properties from an investor’s other assets, making it harder for a creditor or a plaintiff to repossess (or be awarded) their property. In addition, the separation that a holding company provides often makes things easier from a financial reporting and taxation standpoint.
Many sizable commercial real estate projects are not simply purchased and developed by one firm; instead, they are structured as joint ventures (JVs), in which one party provides commercial real estate expertise and the other party provides capital. In essence, a joint venture is very much like a commercial real syndication, except it generally between 2 or more large individuals or firms rather than one sponsor and a larger group of investors.