A free real estate JV waterfall and promote model template in Excel, with a full worked case
A preferred return, a 50/50 catch-up, a second tier at an IRR hurdle, and the full result for both the capital partner and the sponsor: nine linked sheets, one fictional joint venture, no macros.
The file prices a real estate joint venture between a capital partner and a sponsor: not a fund-level waterfall across many investors, but the two-party split a term sheet actually negotiates. On 100 of committed equity, split 90/10, an 8% preferred return and a 50/50 catch-up bring the sponsor to a 20% share of profit before a second tier at a 14% partner IRR raises the promote to 30% above it. At an exit of 250 in year five, the capital partner earns a 16.71% IRR after the promote and the sponsor turns its 10 of capital into 5.51 times itself. Every one of those numbers is a formula you can move.
Download the template
One Excel file, no macros, nothing locked. No account, no email address.
Nine sheets, in the order the calculation runs. Blue text is an input you may edit; black text is a formula; yellow fill marks the assumptions that carry the answer. If you need a fund-level distribution waterfall across many investors instead of a two-party joint venture, the site also has a distribution waterfall model.
Read me
What the workbook is, where to start, and the three things to check against your own term sheet before trusting a number here.
Structure 2
The waterfall used throughout the book: return of capital, an 8% preferred return, a 50/50 catch-up solved in the cell (not assumed), a tier to a 14% partner IRR, and the residual above it. The nine yellow cells at the top are the whole deal.
Structure 1
The same deal with a preferred return and no catch-up at all: the simplest structure in the market, and the one sponsors dislike, because the promote never recovers a full share of profit.
Structure 3
Equity multiple hurdles instead of an IRR: no exit year anywhere on the sheet, because nothing on it depends on one, and a worked example of the most common sizing error in a hand-built waterfall.
Comparison
The same 250 of exit proceeds at seven different exit years, run through all three structures side by side, to show which one charges for time and which one does not.
Promote and its cost
The promote at four exit outcomes, the investor's IRR run twice (with the promote and without it) so its cost in IRR points is explicit, and a leverage table pricing what more debt does to the promote.
Your deal
The same engine with the venture's own numbers stripped out and one realistic example left in place to overwrite.
Other chapters
The other chapters' arithmetic recomputed on the same engine: the leverage table, the fee bases and total sponsor economics, the promote-and-terms grid, the buy-sell, the rescue, the retention and the lookback.
Checks
Every figure the book prints set against what the model computes, with a verdict on each line. The sheet ends ALL OK.
What the worked deal returns
Measure
Value
Total committed equity
100
Investor / sponsor equity split
90% / 10%
Preferred return
8.00%
Catch-up split / target
50% / 20% of profit
Second hurdle, partner IRR
14.00%
Promote below / above the hurdle
20% / 30%
Sponsor multiple on its own capital
5.51x
Investor IRR after the promote
16.71%
Investor IRR, sponsor at pro rata only
20.11%
Promote as a share of the venture's profit
22.29%
Read the last two lines together. Without a promote the investor's 90 of equity would earn a 20.11% IRR; with one, 16.71%. That gap, 3.40 points of IRR, is the entire cost of aligning the sponsor with the deal succeeding, and it is a number few sponsor models quote unprompted. Raise the exit proceeds to 320 on the same structure and the promote alone rises to 54.43, thirty-five times what it is at an exit of 150, while the venture's own proceeds only slightly more than double: that convexity, not the headline split, is what a promote is actually for.
How to use it on your own deal
Open Structure 2 and overwrite the nine yellow cells: the equity split, the preferred return, the catch-up terms, the second hurdle and its promote rates, the exit year and the net proceeds.
Compare Structure 1 and Structure 3 on the same numbers if your term sheet has no catch-up, or uses a multiple hurdle instead of an IRR hurdle.
Read Promote and its cost before quoting a single IRR: it prices the promote both as a share of profit and in IRR points, side by side, which most sponsor models never show.
Use Comparison to see how each structure prices the same proceeds at a different exit year: a preferred return charges for time; a multiple hurdle does not.
Keep the Checks sheet: once you change inputs it stops matching the book, which is expected. Use its structure for your own tie-outs.
Questions people ask about it
Is this JV waterfall model really free?
Yes. It is a companion file to a book. There is no sign-up, no email address and no paid version.
Does it use macros or circular references?
No macros and no circular reference: the catch-up that lifts the sponsor to its target share of profit is solved in closed form, not by iteration, so the file recalculates in Excel, LibreOffice or Google Sheets without iterative calculation.
Why does raising leverage increase the promote?
Because the promote is earned on the equity multiple, and less equity chasing the same price move produces a higher multiple. On the same asset and the same exit price, 60% loan to value gives a promote of 7.79; 75% loan to value gives 12.50, sixty per cent more promote on thirty-seven per cent less equity. Both sides do better in this scenario, which is why leverage is rarely raised as an objection when a deal is working.
Can I use it for a real deal?
You can reuse the structure. The venture, the partners and every figure in it are fictional, and nothing here is investment advice.
The rest of the files
This template is one of the companion files for Real Estate Joint Ventures: the full set adds
the complete venture rebuilt end to end, the failure-to-fund, clawback and removal workbook, and the term sheet checklist and diligence questions. Free, like this one.