W typically finances the acquisition and development of properties through a combination of their own cash, private investors and institutional financing. Investor participation structures vary, but investors always receive the return of their entire capital investment and a preferred return prior to any participation by W.
Investments are generally owned by investors who hold title as tenants in common and/or investors who are members of a separate, single-purpose, limited liability company whose managing member is W. Investments are structured to satisfy Revenue Procedure 2002-22 of the Internal Revenue Code Section 1031 allowing TIC investors to fulfill tax-deferred exchanges. Investors have pro rata ownership interests based on their capital investment. Each investment is financed with 50% to 70% mortgage secured senior debt. Investors receive an 8.0% to 12% annualized preferred return on their capital investment. Investors receive 25% to 75% of profits from sale or refinance of the property. The target overall Internal Rate of Return for an investment is 20% to 50%, depending on the investment risks.