Preferred Equity for Land Sites
Quick answer
Kismet Kapital structures pref equity financing for land sites at 85–90% LTC, typically closing in 30–60 days. Entitlement status, carry cost, and exit visibility drive structure.
- Product
- Preferred Equity
- Asset Class
- Land
- Typical Leverage
- 85–90% LTC
- Typical Close
- 30–60 days
- Term
- Co-terminus with project plan
- Recourse
- Non-recourse, equity-style
Overview
Land financing — including entitled, pre-development, and transitional sites — is one of the most structured corners of CRE capital, generally led by debt funds and private credit. Preferred equity is junior to debt and senior to common equity, with a fixed coupon (sometimes accruing) and priority on distributions and capital return. It is often used to fill the gap between senior debt and sponsor co-invest. For land sites, pref equity proceeds are sized against entitlement status, carry cost, and exit visibility drive structure. loans typically carry shorter terms with milestone-based draws and structured equity layers.
Why sponsors use Kismet Kapital for land pref equity capital
land transactions are typically capitalized with Bridge, Land Loan, Preferred Equity, JV Equity. Kismet Kapital identifies which of those structures the current lender market will actually fund for your business plan, then runs a competitive process across the desks pricing land risk today.
Terms at a glance
- 85–90% LTC typical proceeds for pref equity on land sites.
- Executions generally close in 30–60 days.
- Fixed coupon with accrual, priority return of capital, and major-decision rights.
- Common structures: Bridge, Land Loan, Preferred Equity, JV Equity.
- Construction equity gap funding
- Acquisition co-invest replacement
Key facts
Kismet Kapital typically closes pref equity financing on land sites in 30–60 days.
Preferred Equity for land sites generally size to 85–90% LTC.
Land capital stacks commonly include Bridge, Land Loan, Preferred Equity, JV Equity.
Frequently asked questions
What leverage is available on pref equity financing for land sites?
Preferred Equity for land sites typically size to 85–90% LTC, with the exact proceeds driven by in-place income, business plan, and sponsor experience.
How long does a pref equity loan on land take to close?
Most land pref equity executions close in 30–60 days from signed term sheet.
How do lenders underwrite land sites?
Entitlement status, carry cost, and exit visibility drive structure. Loans typically carry shorter terms with milestone-based draws and structured equity layers.
What capital structures work best for land sites?
Land Sites are typically capitalized with Bridge, Land Loan, Preferred Equity, JV Equity. Kismet Kapital engineers the mix that maximizes proceeds without breaking the business plan.
When is pref equity the right product for an land deal?
Structured equity sitting between common equity and mezzanine, with priority distributions. It fits land transactions such as construction equity gap funding and acquisition co-invest replacement.
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