Preferred Equity


Preferred Equity

Basic Terms: NYMT’s investment must meet the general requirements as noted in its Investment Focus.

Investment Amount+$5.0 million
Geographic FocusNational (Conventional Apartments, Build for Rent (SFR), Age-Restricted)
Accrued Return+13%
Surplus Cash Flow+7%
Maximum LTV Constraint90% (Senior + Investment Amount)
Investment Term<12 years (typically co-terminus with Senior maturity)
Origination Fee1.0%
Minimum Return Multiple1.5x
Senior Loan Term5+ years, Agency financing preferred
Drag to MarketFollowing 2nd anniversary of the Investment

General Characteristics

NYMT’s position in the capital stack is senior to the common equity and subordinate to the Senior loan

    • During the term of the investment, Surplus Cash Flow is distributed to NYMT with excess distributed to the sponsor
    • At a capital event, NYMT’s investment and any Accrued Return is distributed to NYMT with excess distributed to the sponsor
    • A Minimum Return Multiple must be met at exit for NYMT’s Investment

NYMT uses a preferred equity investment that directly invests into an LLC as a member with governing terms provided in an operating agreement

NYMT’s investment is nonrecourse except for carve-out guarantees of a similar nature to Senior loan obligations

NYMT’s investment does not have a performance measure for stepping into the management of the company

    • NYMT has a right to Drag to Market after 2 years
    • NYMT will require an upfront fee as needed