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
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- 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”
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- Make sure the deal works first and treat the Opportunity Zone as an added benefit
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