Is a 7.5 percent debt note on a stabilized suburban office worth more than an 8.5 percent preferred equity note on a workforce multifamily right now

The 9.5 percent kicker only pays if they exit at or above 1.25x, which on a 36-month Columbus deal means they're betting on cap rate compression or rent growth that the current construction pipeline makes pretty hard to model cleanly. What's the in-place NOI versus what the deck underwrites at exit?

Preferred equity in a squeeze scenario doesn't just underperform, it waits. That part never shows up in the deck.

The assumption doing the most work in the Columbus deal is the exit cap rate embedded in the 1.25x EM threshold. If the sponsor underwrote a sub-5.5 cap on exit and the Columbus multifamily market is pricing workforce product at 6 to 6.5 by 2027, that EM target slips before operations even become a question. The kicker is priced off an exit that may not materialize, which means the 9.5 percent back-end is not additional yield, it is contingent yield that only exists if the sponsor's cap rate assumption holds. Ask what exit cap they modeled and stress it 75 basis points. See where preferred equity breaks even.

The preferred equity structural risk you named is real. In a squeezed exit, common equity gets impaired first, but if the deal cannot refinance or sell above the preferred equity waterfall minimum, the sponsor has incentive to hold and service rather than crystallize a loss. That means your 36-month term may not be 36 months in practice. Ask explicitly whether the preferred equity has a hard redemption right or a soft one, and what the enforcement mechanism looks like if the sponsor elects to extend.

On the Overland Park office note: 87 percent occupancy on a suburban office asset is not the problem. The problem is lease rollover within or just after your 24-month window. If anchors roll in 2026 and the refinance depends on occupancy holding, the first lien position matters a lot less when the underlying asset re-appraises at 65 cents on the dollar. Pull the rent roll and look at lease expiration dates, not just current occupancy.

The Phoenix flex experience is worth naming clearly: lien position did not save the note when the asset itself deteriorated. Overland Park is not Phoenix flex, but the mechanism is the same.

What does the Columbus deal's preferred equity documents say about the sponsor's ability to extend the term, and is there a defined trigger for your enforcement rights?