Four pages is suspiciously short for a waterfall amendment. When my STR fund manager did something similar in 2022, bumping the pref from 7 to 9, the four-page doc looked clean until my attorney flagged that the hurdle rate for the promote tier had been quietly compressed. Before it was an 18% IRR threshold before the manager took 20 carried interest. After the amendment it was a 14% IRR threshold, same 20 carry. On a five-year hold with modest appreciation that difference in threshold is where almost all the LP upside actually lives, so the higher pref was basically cosmetic. The catch-up mechanics stayed identical on paper, which is what made it look clean on three reads.
The specific thing I would chase in your four pages is whether the promote hurdle moved at all, even by two or three points, and whether the definition of gross asset value or distributable proceeds was retouched anywhere in the recitals or definitions section, not just the waterfall table itself. That is where I have seen the offset buried, in a redlined definition that changes what counts as a realized gain before distributions flow. Hospitality funds are also more likely than residential funds to have discretionary capex carve-outs that sit above the waterfall entirely, so if this amendment touched anything about reserve accounts or renovation holdbacks, that is worth a hard look because money pulled into reserves never even reaches the pref calculation. If you are in a market like Scottsdale or Nashville where asset values ran up fast and are now softening, a compressed hurdle on the promote is a much bigger real dollar problem than it would be in a stable drive-to leisure market, because the spread between your pref and the promote tier is where you either win or get diluted.
