Preferred equity is an investment that sits between the senior mortgage and common equity in a real estate deal's capital stack.
Log in to followI'm working out what my first deal really costs and pref equity keeps coming up as the thing that fills the gap between what a bank will lend and what a sponsor has. Every explana…
Working through a recap where the sponsor has offered me a choice on where the pref sits and I want to hear the room argue it before I decide. Option one, I come in as a preferred…
Been comparing four pref structures for a slot in a fund I'm slowly building, and every one of them has a different idea of what protects the investor. What I keep noticing is tha…
I'm looking at a 180-unit garden deal where the senior is sized to a 1.20x coverage on its own and the sponsor needs another 4.5 million to close the refi gap. The old mortgage wa…
I've been reading pref equity summaries for a couple of months and one line keeps stopping me. The pref investor doesn't get a mortgage on the property. You get a membership inter…
I've been reading pref documents rather than doing them, and the same negotiation appears in every one. The sponsor will concede either economic certainty or timing certainty. Rar…
Everything I read puts pref equity returns in roughly the 10 to 15 percent band. That's a wide band for a single asset class and I don't yet have a feel for what moves you across…