Texas LP Transparency Report

We're starting to see quite a bit of distress starting to rear it's ugly head in the larger Texas market. We'll actually see it across the southeast from Texas through the Carolinas in the coming months. Thats why it's as important as ever to make sure you get the full scoop before investing in any of the trendy areas we saw get so much attention through covid. Below is a good example of a Texas deal that provided a meaningful amount of transparency to their potential investors. Enjoy.

Documents Provided:

Investment Summary
Offering Memorandum (OM)
Private Placement Memorandum (PPM)	X
Partnership Agreement/Operating Agreement (PA/OA)
Subscription Agreement
Excel Proforma (proforma)

Due Diligence:

Yes = Info provided with answer of “yes”

No = Info provided with answer of “no”

NA = The info was not provided and we cannot answer.  “Not Available”

Question and (where information can be sourced from)	Yes/No/Not Available
1.        Is the address of the deal listed in any of the documents? (Investment Summary, OM, PPM)	Yes
2.        Is the GP forming a legal entity, e.g. LLC, LLP, SPV? (OM, PPM, Operating Agreement)	Yes
3.        Did the GP provide an organization chart? (PPM)	Yes
4.        A) Has the GP exited deal/s in this state before? (Investment Summary, OM, PPM)	Yes
B) Has the GP exited deal/s in this MSA before? (Investment Summary, OM, PPM)	Yes
C) Does the GP have ongoing deal/s in this state? (Investment          Summary, OM, PPM)	Yes
D) Does the GP have ongoing deal/s in this MSA? (Investment Summary, OM, PPM)	Yes
5.        For value-add, new developments, has the GP provided a list of competing new developments in the area? (OM, PPM)	Yes (0.5)
6.        Was a data or sensitivity table provided? (OM, PPM)	NA
7.        Is the GP putting cash equity into this deal? (OM, PPM)	Yes
8.        Is there a fee structure disclosure in any of the docs? (OM, PPM, PA/Operating Agreement)	Yes
9.        A) Is there an acquisition fee? (OM, PPM, PA/Operating Agreement, Proforma)	No
B) Is there a development fee? (OM, PPM, PA/Operating Agreement, Proforma)	Yes
C) Is there an asset management fee? (OM, PPM, PA/Operating Agreement, Proforma)	No
D) Are there any other fees? (OM, PPM, PA/Operating Agreement, Proforma)	No
10.  A) Net of GP fees on day 1, is the GP (excluding any co-GPs putting in more than 5% of the total equity in the form of cash? (OM, PPM, PA/Operating Agreement, Proforma)	NA
B) “”… >2% of the total equity in the form of cash?  (OM, PPM, PA/Operating Agreement, Proforma)	NA
C) “”…>0% of the total equity in the form of cash? (OM, PPM, PA/Operating Agreement, Proforma)	NA
11.  Has the GP provided their source and terms of the debt? (OM, PPM)	Yes
12.  Did the GP provide access to a model in excel format with formulas? (Proforma)	NA
13.  Is there a rollover feature in the waterfall to add any shortfall in a pref hurdle from one year to the next? (Proforma, PPM)	Yes
14.  A) Is the pref hurdle calculation based on the initial LP capital contribution? (Proforma)	No
B) Is the pref hurdle calc based on the LP’s unrecovered capital? (Proforma)	Yes
15.  Is the GP able to earn a promote prior to LPs getting a full return of their capital and an initial pref hurdle? (OM, PPM, Proforma)	No
16.  Are there any disclosures regarding construction budget provisions – such as guaranteed maximum price contracts, contingency reserves, and responsibility for cost overruns, and how these could impact the LP? (OM, PPM)	Yes
17.  A) Is there a mandatory capital call provision? (PPM, PA/Operating Agreement)	No
B) Is there a voluntary capital call provision? (PPM, PA/Operating Agreement)	Yes
18.  Is there a limit on the indemnification clause for fraud, negligence, mismanagement, willful misconduct, or any kind of action in bad faith breaching the agreement? (PPM, PA/Operating Agreement)	Yes
19.  Will the GP have a third-party accountant doing taxes for the company and the entity holding the deal? (OM, PPM, PA/Operating Agreement)	Yes
Total number of questions answered	15.5

Executive Summary

Out of 19 key questions, 15.5 were answered, while 3.5 were marked “Not Available” (NA). The General Partner (GP) provided meaningful detail across a wide range of topics, including the fee structure, legal elements, and capital calls.

We'll begin by highlighting a few of our partial scores or nuanced “Yes” answers. For example, while no specific street address is listed—given that this is a ground-up development—the materials provide rich context around the location, including major landmarks and highway access, which we found sufficient.

On the track record side, the PPM notes on page 5 that the sponsor successfully exited Waterford at Summer Park, located just two blocks from the subject property. This satisfied our criteria for Questions 4a and 4b. On page 6, the sponsor is shown to have over $300 million in current development activity, supporting affirmative responses for 4c and 4d, especially given their Houston base and project presence in Texas.

In Question 5, while there’s good detail around current competition—including a project delivered in 2020—there’s no mention of new supply currently under construction or in lease-up, so we awarded 0.5 points.

The area that warrants further discussion is the joint venture structure between Buckhead and Juniper. While the PPM was prepared and issued by Juniper, Buckhead is clearly positioned as the developer, responsible for construction and execution. Juniper, meanwhile, appears to serve as the capital and structuring partner in the JV. Based on PPM disclosures (pp. 5, 27, 33), it's evident that the joint GP team is contributing capital. For clarity, we refer to Buckhead as the GP, Juniper as the co-GP, and the “JV GP group” as the collective sponsor.

The PPM notes a total sponsor contribution of $2.599 million, or 23% of total equity, and 5% of the total capital stack (debt + equity), which well exceeds the minimum thresholds we look for in Questions 10a–c. That said, while the amount is disclosed, it is not fully broken out by contributor. Page 27 references capital from “principals, family, colleagues,” but does not specify how much is coming directly from Buckhead principals, which we view as a critical point of alignment with LPs.

Despite this, the PPM overall offers above-average clarity around the waterfall structure, organizational roles, backgrounds, and legal mechanics, all of which contribute to a strong transparency profile. Two of the most critical factors we evaluate are:

1. The GP’s track record, and

2. Whether they’re contributing personal capital

In this case, the sponsor team performs well on both fronts, with a few details worth clarifying.

If we were personally evaluating this investment, we would ask the GP to provide:

• A breakdown of how much capital is being contributed directly by Buckhead principals, versus other JV partners

• A data or sensitivity table (if available)

Please remember: We strongly encourage investors to conduct their own due diligence, ask follow-up questions, and confirm that any investment aligns with their risk profile and portfolio strategy.

Transparency Score

15.5 out of 19 — Good.This is one of the stronger transparency scores we’ve awarded to date, reflecting solid disclosures and thoughtful presentation. A few small gaps remain, but overall, the offering materials are well above average.

Key Takeaways / Major Risks

In many cases, when a GP does not clearly disclose whether they’ve invested personal capital, it suggests that they haven’t. However, in this case, the situation is more complex due to the joint venture structure between two experienced firms.

We’ve also observed GPs managing multiple projects at once—some with personal capital at stake and others without. In our experience, projects with direct GP investment often receive greater focus. Given Buckhead’s $330M in active development, we believe it’s reasonable to seek more clarity about how much capital they’re personally committing to The Deal.