We arrange preferred equity financing up to 90% Loan-to-Cost
Preferred equity investments are in a junior position behind the first mortgage, but are in a senior position to the sponsor’s equity investment, often referred to as common equity. For example, when net cash flow is produced from a property or profits are earned upon a capital event (sale or refinance), preferred equity investors are paid after the senior lender, but before the common equity. Since preferred equity is junior to the senior mortgage, it carries a higher degree of risk and warrants a higher rate of return than the interest rate charged on the first mortgage.
