Preferred Equity for Office Assets
Quick answer
Kismet Kapital structures pref equity financing for office assets at 85–90% LTC, typically closing in 30–60 days. Underwriting is leasing-driven: in-place income, rollover, TI/LC reserves, and credit profile.
- Product
- Preferred Equity
- Asset Class
- Office
- Typical Leverage
- 85–90% LTC
- Typical Close
- 30–60 days
- Term
- Co-terminus with project plan
- Recourse
- Non-recourse, equity-style
Overview
Office capital remains highly structured, with most transactions capitalized through a blend of senior debt, mezzanine, and preferred equity tied to leasing momentum. 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 office assets, pref equity proceeds are sized against underwriting is leasing-driven: in-place income, rollover, ti/lc reserves, and credit profile. repositioning capital often requires structured debt with hold-back tranches.
Why sponsors use Kismet Kapital for office pref equity capital
office transactions are typically capitalized with Bridge, Mezzanine, Preferred Equity, Permanent (Selective). 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 office risk today.
Terms at a glance
- 85–90% LTC typical proceeds for pref equity on office assets.
- Executions generally close in 30–60 days.
- Fixed coupon with accrual, priority return of capital, and major-decision rights.
- Common structures: Bridge, Mezzanine, Preferred Equity, Permanent (Selective).
- Construction equity gap funding
- Acquisition co-invest replacement
Key facts
Kismet Kapital typically closes pref equity financing on office assets in 30–60 days.
Preferred Equity for office assets generally size to 85–90% LTC.
Office capital stacks commonly include Bridge, Mezzanine, Preferred Equity, Permanent (Selective).
Frequently asked questions
What leverage is available on pref equity financing for office assets?
Preferred Equity for office assets 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 office take to close?
Most office pref equity executions close in 30–60 days from signed term sheet.
How do lenders underwrite office assets?
Underwriting is leasing-driven: in-place income, rollover, TI/LC reserves, and credit profile. Repositioning capital often requires structured debt with hold-back tranches.
What capital structures work best for office assets?
Office Assets are typically capitalized with Bridge, Mezzanine, Preferred Equity, Permanent (Selective). Kismet Kapital engineers the mix that maximizes proceeds without breaking the business plan.
When is pref equity the right product for an office deal?
Structured equity sitting between common equity and mezzanine, with priority distributions. It fits office transactions such as construction equity gap funding and acquisition co-invest replacement.
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