MFEG Preferred Equity Finance

Spread capital across projects, start earlier on a project and potentially increase your return on cost.

Preferred Equity Finance

Preferred equity is a form of financing that effectively takes a direct stake in a project and is paid back before common equity but behind any debt positions. Typically, a preferred equity facility will come with a coupon rate of annual return rather than a profit share arrangement.

Like mezzanine funding, taking a preferred equity facilitiy may enable a developer to spread capital across projects, start earlier on a project and potentially increase their return on cost. Preferred equity differs from mezzanine finance, however, as rather than take a 2nd mortgage position on the property with a defined interest rate, a provider will take an equity stake in the development entity, usually with a fixed coupon rate. The end result is very similar but this structuring can be more suitable than mezzanine finance in certain situations, such as where the senior debt provider does not allow a mezzanine finance facility to go in behind them.

As a business that is focused on solutions and with a flexible model of funding, MFEG has the ability to structure the most appropriate financing model for a particular project including the taking and arranging of preferred equity positions where it is appropriate and workable to do so.

Funded Transactions

Morwell, VIC

41.6ha (102.8 acres)
Lending Amount: $4.2 m
Solution Provided: Land Hold First Mortgage

 

Elwood, VIC

6 Luxury Townhouses
Lending Amount: $6.4 m
Solution Provided: Residual Stock

 

Box Hill, VIC

Construction - 3 retail, 6 offices, 56 apartments
Lending Amount: $21.9 m
Solution Provided: First Mortgage and
Mezzanine Funding

 

 

Gosford North, NSW

40 apartments
Lending Amount: $11.7m
Solution Provided: First Mortgage with Preferred Equity Facility

Coburg North , VIC

63 Premium Warehouses and Office Warehouses
Lending Amount - $13 m
Solution Provided - First Mortgage

 

 

Oakleigh, VIC

73 apartments and 2 retail
Lending Amount: $22m
Solutions Provided: First Mortgage and Mezzanine Funding

Port Melbourne, VIC

16 Luxury apartments construction
Lending Amount: $12.8
Solutions Provided: First Mortgage

 

Preston, VIC (Stage 1)

114 apartments and 1 retail
Lending Amount: $31m
Solution Provided: First Mortgage and Mezzanine Funding

Greensborough, VIC

36 apartments
Lending Amount: $13m
Solution Provided: First Mortgage, Mezzanine Funding and Cost Overrun Facility

Clifton Hill, VIC

17 apartments
Lending Amount: $7m
Solution Provided: First Mortgage with no guarantee required from unit holders of Borrowing Entity

Review our other lending options

Remember at MFEG we tailor borrowing for each client. Be sure to review all six approaches below and contact us with a quick or detailed enquiry.

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