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The Haryana Urban Development Authority (HUDA) had invited proposals for developing an Information Technology (IT) Park near the township of Panchkula in northern India. Sreeni Iyer, a partner at AMII Advisors, was considering a bid for this project in partnership with LIRA Developers, a public company. The fact that the Haryana state government had initiated this project suggested that regulatory approvals would not be a hurdle. However, the exit price and exit options needed to be carefully assessed by Iyer and his team.
The pedagogical objectives of the case are to (1) understand the determinants of risk and return in commercial real estate, (2) understand how capitalization rates are used to determine the value of commercial real estate projects, and (3) understand how an exit decision is complicated by a partnership with a developer.