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Capital. Relationships. Results.
Understanding the Capital Stack
How preferred equity fits between senior debt and common equity.
Capital Stack
The middle layer of the capital stack.
Risk and return generally increase as capital moves from senior debt toward common equity.
Senior Debt
First-priority position with fixed-income-oriented returns and lender covenants.
Preferred Equity
Moderate position with priority distributions, negotiated protections, and possible upside participation.
Common Equity
Residual ownership with the highest potential return and the highest risk.
Preferred equity for real estate sponsors and investors.
Capital. Relationships. Results.
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