Equity capital is the most critical and challenging component of any real estate transaction. AMA’s understanding of the capitalization parameters to create the optimal capital structure and accretive capital alternatives is critical to its clients.
AMA undertakes a thorough analysis of the deal parameters and transaction, based on real-time knowledge of the capital markets. Our knowledge and expertise allow us to match the right equity structure, and most importantly, the right equity partner, to each client’s unique set of circumstances.
AMA’s extensive relationships with equity investors include domestic and foreign investors, institutional and high net worth investors, family offices, opportunity funds, sovereign wealth funds, pension fund advisors and endowments are what sets it aside from its competitors.
AMA’s unparalleled access to capital enables them to operate with a comprehensive investing expertise and be an industry leader in the equity placement business.
Our expertise arranging equity financing include the following:
- Joint Venture Financing
- Entity Level Capitalization and Recapitalization
- Programmatic Financing
- Individual Asset Financing
- Portfolio Financing
- Preferred Equity/Mezzanine
Mezzanine/Preferred Equity Financing can be structured in many different ways. AMA assists borrowers who need to bridge the gap between what a conventional lender is willing to finance, and the total amount needed to complete a transaction. The transaction can be structured as partnership debt, preferred equity, or a mezzanine loan. The key to these transactions are the ability to creatively structure the transaction. There is a structural difference between the two products:
- Mezzanine Debt is generally structured as a loan that is secured by a property and senior to any equity, but junior to the senior loan on the property.
- Preferred Equity, on the other hand, is an equity investment in the property-owning entity. It is not secured by the property but rather by an interest in the entity investing in (or owning) the property.
Mezzanine Debt is an effective tool to provide sponsors higher levels of leverage at less cost than pure equity. In return, investors get a higher yield for their additional risk in a subordinated position.
Preferred Equity provides a coupon return, similar to debt, and may provide the investor with upside potential, in the form of a kicker, of remaining equity.
These options help developers fill their gap in the capital stack.