In October 2009, Godrej Properties Limited (GPL), a leading Indian real estate development company, announced its plans for an initial public offering (IPO), seeking to raise approximately $100 million. In the past, GPL has also raised funds by partnering with several financial sponsors and private equity funds, selling up to a 49% stake in some of its development projects. Which investment option offers the most attractive risk-adjusted returns? Does a “going-concern” in the development business create more value for the investor than a “selective” project level investment?

In early 2008, two local Seattle developers had the opportunity to purchase a historic hotel in an off-market deal from a non-profit entity. Though the building was being used as a single room occupancy hotel and would require extensive modifications, the building was solid, the location great, and the price per square foot reasonable. Did this deal justify the risks of acquisition, renovation, and repositioning?