Preferred equity providers may offer other investment vehicles, such as mezzanine lending or joint ventures. In a joint venture transaction, the joint venture investor occupies a different position than it does as a preferred equity provider...
Though there is not an “official” definition for the structures sometimes referred to as “hard” or “soft” preferred equity, there are characteristics that agencies tend to view as making a deal one or the other. This can matter quite a bit when..
Sponsors are familiar with using preferred equity alongside a long-term mortgage loan, typically with a term of 5-12 years. What they may not have considered, however, is that preferred equity can be used alongside bridge debt in a similar..
Sometimes, the closing timeline for a transaction dictates that the senior loan must close prior to the preferred equity close. There can be several reasons for this, including sponsors making the decision to add preferred equity later in the..
The process for closing a stabilized deal with preferred equity typically runs around 4-6 weeks once a term sheet is signed. However, sponsors may find themselves in a position of needing a faster close than that. There are several variables that..
One way to reduce upfront costs during diligence is to determine whether a preferred equity provider can re-use existing third-party reports. Every provider will have specific guidelines that apply on a case-by-case basis, but sponsors may want..