Tag Archives: risk

The Equity Waterfall for a Syndicator

I just wrote an article about my preferred structure for structuring the equity financing with senior equity, preferred equity, and common equity. A syndicator that raises private equity may consider an equity waterfall that is similar to a combination of debt and equity. Treat the senior equity like a 1st lien and the preferred equity […]

Risk Spread Premium

Risk Spread Premium I just read a short article from a real estate guru. He was talking about the “Risk Spread Premium” on real estate Capitalization (CAP) Rates compared to the 10-year US Treasury bond. His basic assertion is to compare the difference (spread) between the average CAP rate of income properties to the yield […]