

RPP - Preferred Equity vs. Common Equity
RPP - Preferred Equity vs. Common Equity
Rand Partners own Dylan Marma and Mike Taravella discuss the evolution of preferred equity in the multifamily investing space.
- Preferred Equity
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- Receives preferred return of cash flow before common equity
- Doesn’t receive upside
- Ideal for investors who want to receive yield
- This structure has been used in Office and Retail asset classes
- Common Equity
-
- Doesn’t receive preferred return
- Receives upside
- Ideal for opportunistic investor seeking high IRR
- Expert Tip: Don’t just invest in an Opportunity Zone for the “Tax Benefits”
-
- Make sure the deal works first and treat the Opportunity Zone as an added benefit
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Rand Partners own Dylan Marma and Mike Taravella discuss the evolution of preferred equity in the multifamily investing space. Preferred Equity Receives preferred return of cash flow before common equity Doesn’t receive upside Ideal for investors who want to receive yield This structure has been used in Office and Retail asset classes Common Equity Doesn’t receive preferred return Receives upside Ideal for opportunistic investor seeking high IRR Expert Tip: Don’t just invest i...
Rand Partners own Dylan Marma and Mike Taravella discuss the evolution of preferred equity in the multifamily investing space. Preferred Equity Receives preferred return of cash flow before common equity Doesn’t receive upside Ideal for investors who want to receive yield This structure has been used in Office and Retail asset classes Common Equity Doesn’t receive preferred return Receives upside Ideal for opportunistic investor seeking high IRR Expert Tip: Don’t just invest i...
Rand Partners own Dylan Marma and Mike Taravella discuss the evolution of preferred equity in the multifamily investing space. Preferred Equity Receives preferred return of cash flow before common equity Doesn’t receive upside Ideal for investors who want to receive yield This structure has been used in Office and Retail asset classes Common Equity Doesn’t receive preferred return Receives upside Ideal for opportunistic investor seeking high IRR Expert Tip: Don’t just invest i...
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Will Coleman and Mike Taravella Interview Rob Beardsley of Lone Star Capital Group Key Information: Preferred Equity is a hybrid product which is subordinate to the senior loan but has payment priority over common equity positions. Benefits of Preferred Equity include: Sponsors and developers are provided with a higher degree of leverage at lower cost than common equity. For real estate investors it also provides opportunity to capture a fixed rate of return prior to payment and can sometimes i...
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Will Coleman and Mike Taravella Interview Rob Beardsley of Lone Star Capital Group Key Information: Preferred Equity is a hybrid product which is subordinate to the senior loan but has payment priority over common equity positions. Benefits of Preferred Equity include: Sponsors and developers are provided with a higher degree of leverage at lower cost than common equity. For real estate investors it also provides opportunity to capture a fixed rate of return prior to payment and can sometimes i...
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