Fill the gap in the stack without giving away the deal.
When senior debt stops short of what a deal needs and you don't want to dilute common equity, preferred equity bridges the gap. We structure and place it so the cost is fair, control stays where it belongs, and the sponsor keeps the upside that justified the deal.
The layer between debt and equity
Senior debt has gotten more conservative, and the gap between what a lender will fund and what a deal costs has widened. Preferred equity sits in that gap — senior to the common equity, subordinate to the loan — and it can be the most efficient way to complete a stack without raising more common equity at a dilutive moment.
Done well, it is precise. The preferred holder takes a defined return and a priority position; the sponsor retains operational control and the residual upside. Done poorly, it carries punitive rates, hard control triggers, or rights that convert a temporary gap into a permanent loss of the deal. The structure is everything.
We help you decide whether preferred equity is the right tool at all, then negotiate the terms that matter: the rate and any accrual, the redemption schedule, control and cure rights, and what happens in a downside. The goal is capital that solves a real problem without mortgaging the outcome.
- Senior debt leaves a gap you don't want to fill with common equity
- You want to avoid dilution at a low point in valuation
- A recapitalization or partner buyout needs flexible mid-stack capital
- A value-add plan needs a measured bridge to stabilization
- Control and sponsor upside need to be protected in the terms
What we structure
Gap financing
Sizing the preferred piece precisely to the shortfall between senior proceeds and total capitalization — no more dilution than the deal requires.
Return and accrual terms
Negotiating the preferred rate, current pay versus accrual, and any look-back so the cost of capital stays proportionate to the risk it carries.
Control and cure rights
Drawing the line on what triggers a transfer of control and preserving the sponsor's ability to cure — so a temporary stumble does not cost the deal.
Redemption mechanics
Structuring redemption windows, exit fees, and refinancing flexibility so the preferred can be retired on a schedule that fits the business plan.
Priority and waterfall
Defining the preferred's position in the distribution waterfall and its relationship to senior debt and common equity with no ambiguity.
Downside protection
Stress-testing the structure against a base and downside case so both sides understand the outcomes before, not after, things tighten.
How we work
Confirm it's the right tool
We compare preferred equity against more senior debt, mezzanine, or additional common equity and recommend the option that best protects your control and return.
Size and structure
We set the amount, rate, accrual, redemption, and control terms against your business plan, then model the impact on sponsor returns across scenarios.
Place and negotiate
We take the structure to preferred and mezzanine providers we know are active, create competition, and negotiate the terms that move the outcome.
Why structure matters here
- Avoids diluting common equity at the wrong point in the cycle
- Completes the stack when senior debt falls short of the need
- Keeps operational control and residual upside with the sponsor
- Control and cure rights negotiated before they ever come into play
- Cost of capital sized to the actual risk, not a punitive default rate
- A clear, conflict-free waterfall across the full capital stack
Have a gap in the stack?
Tell us where the deal stands and what senior debt leaves uncovered. We'll respond with a direct view on whether preferred equity fits and how it should be structured.