CalculateRealEstateROI

Multifamily

Preferred Equity

Equity tranche with priority over common equity but subordinate to debt.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Fills capital stack between senior debt and common equity at 10-14% yield.

Examples

  • $1M pref equity at 12% behind $7M senior loan, ahead of $2M common.

Common mistakes

  • Confusing preferred equity with preferred return.

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