Multifamily Preferred Equity
Respark is actively sourcing preferred equity investment opportunities for multifamily properties Nationwide via its proprietary sourcing pipeline. Deal volume for existing acquisitions and ground-up development is accelerating due to disruptions in the capital markets. Respark is looking to create long term partnerships with real estate sponsors and institutions across the Unites States. Our partners benefit from flexible capital, which can be tailored to each individual transaction.
Investment Profile
Pref Equity Purposes:
- Acquisition
- Reposition
- Refinance
- Corporate Restructuring
- Construction
- Recapitalization
Markets:
Primary and Secondary MSA’s
Investment Size:
$3 – $25mm
LTV:
80% Max (Debt + Pref)
DSCR:
1.10x (Debt Service + Current Pay Pref)
Current Rate:
4.0% – 7.0%
All-In Rate:
12% – 15%
Term:
3-10 years (Typically coterminous with senior debt)
Transaction Fees:
TBD (Paid by Sponsor)
Application Fee/Deposits:
Sponsor shall be responsible for all expenses incurred by Respark in connection with the Preferred Equity Investment, including legal, out of pocket and other third-party expenses. An application fee and deposit will be due upon engagement.
Early Redemption:
Subject to minimum cash multiple
Benefits:
- Surety of Funding: Respark provides preferred equity commitments utilizing balance sheet capital to fund investments without syndication risk to its Sponsors
- Speed and Flexibility: With committed capital and a team of investment professionals, Respark can underwrite investment opportunities and close in timeframes as short as 21 days from application deposit. Flexible terms include step-up current pay options and the ability to invest across the capital structure
- Experience : Respark and its Principals have provided flexible investment capital across diverse U.S. geographies in conventional, affordable, and student housing totaling more than 20,000 apartment units and 100+ transactions
Sponsor Requirements:
- $50M in Past/Current AUM
- Relevant Transaction and Market Experience
- Non-Recourse Carveout Guaranty
- Completion Guarantee on Construction and Renovations
- No History of Default
In its prequalifying review, Respark will attempt to estimate both the Preferred Equity Amount and the fees and costs associated with the transaction. Actual Preferred Equity Amount and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a Preferred Equity investment.
Our Platform
Respark creates value and generates superior risk adjusted returns in the multifamily residential real estate sector through investment flexibility, operational expertise, buying at a discount to replacement cost, and identifying arbitrage opportunities across asset classes.