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Preferred Equity

Preferred Equity

Loan Size
$2 million - $5 million
Geographic Region
East Coast U.S.
Security
Assignment of Sponsor interest in the owning LLC
Structure
Up to 85% of the required equity in a senior position to the sponsor’s equity
Preferred Return
10-12% preferred return. Unpaid preferred return accrues and compounds monthly
Promote
Sponsor receives a promote on the senior equity, generally 50/50 split of excess profits after payment of preferred return and return of capital to both the senior equity and the sponsor
Fee
Sponsor splits acquisition fee and maintains property management and construction management fees as applicable