preferred equity…how does it work?
Preferred equity may be unfamiliar to even the most experienced real estate professionals. It’s benefits are quite straightforward. Click the image below to view our infographic and get a better grasp of how a FAST Preferred Equity investment, paired with a typical bank construction loan, can optimize your capital stack, reduce your blended cost of capital and juice your returns.
A capital stack including FAST preferred equity AND a traditional construction loan allows sponsor’s to boost leverage at a low cost of capital.
For a hypothetical $40MM development, a capital structure consisting of a bank loan + preferred equity delivers higher returns with a lower blended cost of borrowing compared to alternative high-leverage loans.