Understand investor rights
Distribution shortfalls or breaches of the investment agreement may trigger additional investor protections or changes in control.
Structured capital / equity
Preferred Equity
An equity investment with negotiated payment priority.
Explore representative terms
01 / Program overview
Where it fits.
Preferred equity can support an acquisition, partner buyout or additional project funding. We focus on distribution priorities, investor consent rights and the exit provisions that shape the relationship between the sponsor and capital partner.
Suitable transactions
- Provide additional equity for an acquisition or recapitalization.
- Fund a partner buyout or approved project investment.
- Compare payment priorities, ownership economics and sponsor control.
What we evaluate
- Senior loan restrictions and required lender approvals.
- Distribution capacity, accrued returns and future capital needs.
- Investor consent rights, redemption provisions and exit proceeds.
02 / Market guide
Representative
Market Terms
A starting point for evaluating the structure. Final terms depend on the property, sponsor, business plan and capital provider.
Discuss your scenario| Parameter | Guideline / consideration |
|---|---|
| Investment size | $1M to $100M+ Size and availability depend on the transaction and capital provider. |
| Combined leverage | Evaluated across the full capital structure. Senior debt, subordinate capital and sponsor equity are reviewed together. |
| LTC | Project-specific. Cost eligibility and required sponsor equity are reviewed for each transaction. |
| Term / exit | Aligned with the senior financing and investment exit. Confirm maturity, redemption and extension requirements. |
| Coverage | Based on cash flow after senior obligations. Evaluate the combined payment burden and any accrued amounts. |
| Return / pricing | Negotiated for the transaction. No live return or coupon is represented. Historical term-sheet pricing requires a fresh quote. |
| Payment structure | Current-pay, accrued or a negotiated combination. Review compounding, distributions and any scheduled capital reductions. |
| Priority / security | Preferred ownership position behind mortgage debt. Priority and enforcement rights depend on the executed agreements. |
| Sponsor contribution | Negotiated cash equity and liquidity requirements. Additional capital-call obligations must be explicit. |
| Control / consent | Protective rights and major-decision consent are negotiated. Review transfer, budget, financing, sale and default provisions. |
| Recourse / support | Any guarantees or additional collateral are negotiated. Review support obligations with the transaction documents. |
| Prepayment / redemption | Review minimum return and exit fees. A right to repay or redeem does not mean there is no cost. |
| Reserves | Review senior escrows and additional liquidity needs. Avoid counting the same cash twice. |
| Closing timeframe | Established after the initial review. Reports, documentation, approvals and the transaction schedule determine timing; no guaranteed closing period. |
| Eligible properties | Commercial and multifamily properties that fit the capital provider’s criteria. Eligibility depends on the property, operating plan and senior financing. |
| Geography | Location reviewed with the capital provider. Property location and capital-provider coverage are reviewed early in the process. |
Representative terms are subject to market conditions, underwriting and lender or investor approval. Actual proceeds and structure depend on the transaction.
03 / Structure matters
Look beyond
the headline.
Model the full investment cost
Current distributions, accrued returns, fees and minimum-return provisions can materially affect the amount due at exit.
Start with the property
Let’s discuss the next step.
Share the property type, business plan and timing. We’ll use that context to evaluate the capital strategy.
Discuss Preferred Equity