Preferred Equity
Gap financing solutions for your investment needs.
Program Guidelines
Review our Preferred Equity guidelines below.
Pref Eq, Bridge Loans, A/B Notes, Mezzanine Debt
Description
8% - 14%
Rate*
Up to 80%
Max LTV
Coterminous w/Senior Lender, Options to Exit Between 3 - 5 Years
Term
$1MM - $7MM+
Loan Amounts
Multifamily and SFR Portfolios
Property Types
30 - 45 Days
Timing to Close
1.0x In Place (Using IO Senior + Pref Payments)
Minimum Coverage
13% - 14%
Accrued Return
2%
Origination Fees
None
Exit Fees
Fixed or Floating w/Rate Cap
Senior Loan
Fixed Agency Preferred. Bridge, Bank, CMBS, and HUD Acceptable
Senior Loan Types
Expense Deposit Sufficient to Cover Customary Deal Costs
Deposits
* All rates, terms, and guidelines subject to change.
About CALCAP Strategic Opportunities
A division of CALCAP Advisors, CALCAP Strategic Opportunities benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. With over 150 years of combined experience, CALCAP's executive team has performed in all market cycles and is the ideal partner for sponsors looking to purchase or refinance multifamily properties.
Where We Invest
CALCAP is actively targeting Arizona, Arkansas, California, Colorado, Florida, Georgia, Kansas, Missouri, Nevada, New Mexico, North Carolina, South Carolina, Tennessee, Texas, and Utah within 60 miles of an MSA with a 750,000 or greater population.
CALCAP will consider opportunities outside of our active markets on a case by case basis.
Preferred Equity FAQs
You've got questions, we've got answers.
What is the difference between preferred and other equity?
Common equity tends to have a profit split with Uncapped upside potential. Preferred equity has a lower fixed rate of return but is senior to all other equity in order of payment priority.
Who benefits from preferred equity?
There are two types of sponsors who benefit from preferred equity. The first type seeks ease of access to capital, with larger, single checks from preferred equity investors. This allows them to focus on due diligence instead of raising capital. The second type wants to increase member returns. Preferred equity rates are fixed, leaving room for more promote to sponsors and limited investment partners when opportunities exceed return expectations.
How does preferred equity work?
Unlike loans, preferred equity investments are not secured on title; rather, they are governed by an operating agreement that outlines the terms of the investment. Similar to Joint Venture (JV) agreements, preferred equity will have a variety of control rights and a non-recourse guarantee with standard "bad boy carveouts".
How long does the process take?
30-45 days is common, CALCAP has closed in as little as 10 days.
