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REAL ESTATE INVESTMENT STRATEGIES

Preferred Equity Financing Program

Lument Real Estate Investment Group is a proprietary lending arm of Lument Real Estate Capital Holding, LLC. This group procures competitive, fixed cost of capital preferred equity for borrowers seeking additional leverage in addition to traditional agency first mortgages.

ADVANTAGES

  •  Provides “gap” capital with prepayment flexibility and can be replaced with future, supplemental proceeds from the underlying agency lender.

  • Lower minimum dividends allow for stronger combined debt service coverage and more favorable last dollar preferred equity LTVs. 

  • INVESTMENT AMOUNT

    $2 million and up

  • TERM

    Coterminous with underlying agency mortgage

  • PREFERRED RETURN

    ~ 11% – 15% with flexible pay and accrue structures

  • CURRENT PAY

    Negotiable, generally a minimum of 5%;
    Soft and hard pay structures available depending on senior lender

  • TARGET LTV

    80% – 85%

  • MINIMUM DSCR

    1.05x based on amortizing senior mortgage + current pay

  • AMORTIZATION

    Interest only

  • PREPAYMENT

    Open subject to minimum interest

  • FEES

    Negotiable

  • RECOURSE

    Non-recourse subject to market standard carve-outs

  • GEOGRAPHY

    Primary and Secondary U.S. MSAs

  • SUPPLEMENTAL MORTGAGE

    Fannie Mae and Freddie Mac Supplemental loans can be used to redeem the Preferred Equity as well as provide future, additional leverage


 

For more information, please contact: 

RYAN NORWOOD 
Managing Director, Real Estate Investment Strategies 
C: 503.707.6311 
Ryan.Norwood@Lument.com

The above indicative terms do not constitute an offer, agreement, assurance, guarantee or commitment of credit and are subject to change in any and all respects. None of Lument Structured Finance, LLC or any of its affiliates or any of their respective employees, agents or representatives have provided, and reader has not relied on, any assurance, guarantee or commitment as to the availability of the loan or any other extension of credit. 

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