Structuring Preferred Equity Investments in Real Estate Ventures: Impact of True Equity vs. Debt-Like Equity
Negotiating Deal Terms, Investor Return, Change in Control Provisions; Assessing Remedies and Interactions Within the Capital Stack
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will discuss structuring preferred equity investments (PEIs) from the perspective of both the sponsor and investor and explain the advantages and disadvantages of using preferred equity as a component of a capital stack. The panel will review how PEIs compare and contrast with mezzanine financing and other equity investments, discuss the critical agreement terms and trends in the current market, and outline approaches for negotiating terms and provisions.
- Overview of preferred equity in real estate transactions
- Preferred equity vs. mezzanine debt vs. common equity
- Structuring the preferred equity deal
- Preferred equity economics and management
- Exercise of remedies
The panel will review these and other key issues:
- What are the primary benefits and risks of PEIs compared to other equity investments or mezzanine financing?
- What are the key provisions that counsel to the investor or the financing recipient must understand and negotiate when structuring the PEI agreement?
- How should preferred equity investor counsel address potential default, changes in control, and the exercise of remedies?
Michael J. Fritz
Shipman & Goodwin
Mr. Fritz’ business and corporate practice consists of representing private equity funds, venture capital funds,... | Read More
Mr. Fritz’ business and corporate practice consists of representing private equity funds, venture capital funds, and other business entities in connection with a variety of commercial transactions, including, financings, mergers, acquisitions and dispositions, joint ventures, preferred equity investments, distressed investments and private placements. Additionally, he represents healthcare systems and providers in various different business combinations, including affiliations, M&As, and joint ventures. Mr. Fritz also represents clients in the capacity as "outside general counsel", advising on matters such as business formation, corporate governance, business operations, commercial contracting and other general corporate matters. His clients are in a broad range of industries including real estate, healthcare, technology, financial services and manufacturing. Mr. Fritz’ commercial real estate practice focuses on transactional commercial real estate matters, including the purchase, development and disposition of real estate assets, mortgage and mezzanine financings, preferred equity investments, and the formation of joint ventures.Close