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Mezzanine debt and preferred equity both sit between the senior debt and common equity in thecapital stackand generally serve similar functions to fill a gap in funding and/or provide additional leverage.
The primary difference between the two is that mezzanine debt is generally structured as a loan that is secured by a lien on the property while preferred equity, on the other hand, is an equity investment in the property-owning entity.
Both Mezzanine debt and preferred equity can be effective tools to provide a borrower or sponsor with higher levels of leverage at a lower cost than common equity. In return, investors get a more secured position relative to the equity but a higher yield for their additional risk in being subordinate to the senior loan.
The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found m/oc. For investors and potential investors who are residents of the State of Washington, please send all correspondence, including any questions or comments, to .