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RCRE – Preferred Equity 101 with Rob Beardsley

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 include upside.
  • Preferred Equity offers a hybrid risk/return profile. In addition to payment priority over common equity, it provides some recourse provisions in the case of borrower default.

Read further: https://randcre.com/preferred-equity-101-with-rob-beardsley/

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