Demonstrate a Distinct Competitive Edge or Niche
Why It Matters:
- Family offices often prefer deals where they see a clear advantage—such as off-market deal flow, deep local market knowledge, or a focus on an underserved asset class.
- For smaller GPs, highlighting a niche (e.g., workforce housing in a submarket with high barriers to entry) can differentiate you from bigger institutional sponsors.
Publications Cite:
- GlobeSt and Bisnow repeatedly note that family offices look for sponsors who can access deals that are “too small or unique” for large funds but still present strong risk-adjusted returns.
- Commercial Observer interviews suggest that local market mastery often resonates with family offices looking to place capital outside major gateway cities or in emerging secondary markets.
Emphasize Alignment of Interests and Skin in the Game
Why It Matters:
- Family offices typically want to see that a sponsor is “all-in” on a deal. This includes a meaningful co-invest and fee structures aligned with long-term performance.
- Because family offices often think in generational timelines, they want to ensure the GP’s goals don’t conflict with their patient capital approach.
Publications Cite:
- The Real Deal often highlights that family offices are wary of short-term “fee-driven” sponsors. A sponsor who invests a significant portion of their own net worth, or defers a portion of fees, can demonstrate commitment.
- Bisnow roundtables mention that family offices frequently ask about sponsor liquidity and how sponsor compensation is tied to project success over multiple years.
Highlight a Strong Track Record—Even if on a Smaller Scale
Why It Matters:
- Regardless of size, proven execution on past deals is one of the most decisive factors for family offices.
- Smaller GPs need to show that although their portfolio may be more modest, the successes (exits, returns, stabilized assets) demonstrate consistent performance.
Publications Cite:
- Commercial Observer and GlobeSt note that documented case studies—especially those including real-life IRRs, equity multiples, and timeline metrics—are persuasive.
- Family offices often do exhaustive due diligence; references from past limited partners or lenders can go a long way to validate a smaller GP’s reliability.
Present a Robust Risk Mitigation Strategy
Why It Matters:
- Many family offices consider downside protection just as crucial as upside potential.
- Smaller sponsors can stand out by articulating thoughtful approaches to underwriting, contingency planning, and capital reserves.
Publications Cite:
- PERE articles underscore that family offices pay special attention to capital structure (e.g., how leverage is managed, the type of debt in place) and sponsor contingency plans for market downturns.
- Bisnow has published discussions on how family offices want GPs to anticipate interest rate fluctuations, supply chain disruptions, and labor market tightness—factors that have impacted ground-up development and value-add renovations alike.
Showcase Transparent Reporting and Corporate Governance
Why It Matters:
- Family offices often have fewer layers than institutional investors, but they still require high standards for reporting, compliance, and governance.
- Smaller GPs who can offer clear, frequent, and user-friendly reporting stand out as professional and trustworthy.
Publications Cite:
- The Real Deal quotes family office principals who say lack of transparency is a dealbreaker. They look for sponsors who can provide timely operational updates, financial statements, and standardized performance metrics.
- Commercial Observer highlights the importance of technology platforms (e.g., dashboards or reporting tools) that keep the family office’s investment committee and stakeholders informed.
Provide Clear Growth or Exit Strategy
Why It Matters:
- Some family offices invest with a multigenerational horizon; others may require a clear path to liquidity in 5–7 years.
- Clarifying whether your project aims for stable cash flow, a value-add play with near-term upside, or a ground-up development with targeted exit timelines can help ensure alignment.
Publications Cite:
- GlobeSt interviews with family office representatives often emphasize clarity on how and when returns will be realized (e.g., refinances, partial recapitalizations, or dispositions).
- Bisnow panels stress that family offices have varied objectives: some want core-plus, stable yields, while others pursue opportunistic “development alpha.” Tailor the pitch to their stated preferences.
Make the Case for ESG or Impact (If Relevant to That Family Office)
Why It Matters:
- Many family offices, particularly younger generations—are increasingly interested in sustainable, community-focused, or socially impactful investments.
- If your project incorporates ESG elements (e.g., energy-efficient building systems, affordable/workforce housing components), it can be a powerful differentiator.
Publications Cite:
- PERE and Commercial Observer have featured stories of family offices that prioritize green building practices or invest specifically in projects addressing local housing shortages.
- Bisnow notes that an impact or ESG angle can help smaller sponsors stand out, especially if you can demonstrate tangible data on environmental or community benefits.
Demonstrate Scalability and a Pipeline
Why It Matters:
- Most family offices seek ongoing relationships rather than one-off deals. They prefer sponsors who can replicate successes and grow a portfolio together.
- Presenting a pipeline of future projects or a multi-deal strategy shows that your JV can evolve into a longer-term partnership.
Publications Cite:
- The Real Deal often covers family offices that commit to a GP for multiple deals if the first partnership goes well.
- Commercial Observer articles illustrate how smaller sponsors who can demonstrate a “repeatable formula” for acquisitions or development typically attract more stable LP capital.
Summary of Key Themes
- Differentiated Niche: Emphasize unique market knowledge or product type.
- Meaningful Sponsor Alignment: Show that your personal capital and compensation are tied to the project’s long-term success.
- Proven Track Record: Even smaller track records can be powerful if they show consistent outcomes.
- Risk Management: Detail your underwriting approach, contingency reserves, and capital structure strategy.
- Transparency & Governance: Proactive, tech-enabled reporting fosters trust.
- Clear Timeline & Exit: Ensure the project’s duration aligns with family office objectives, whether short or long horizons.
- Potential Impact/ESG Angle: If relevant, highlight sustainability, social impact, or community benefits.
- Scalability: Illustrate your pipeline to show potential for a long-term JV.
Taken together, these points address what multiple Commercial Observer, Bisnow, GlobeSt, The Real Deal, and PERE sources characterize as family offices’ primary concerns: preserving capital, creating sustainable returns, and partnering with a sponsor who has a clear plan, strong alignment, and a transparent reporting culture. By framing your pitch around these drivers, a GP can significantly improve the odds of landing a JV with a family office.
