Hi gang,
I'm curious, since I never had to deal with this.
If an investor has multiple tranches of equity and debt. Let's assume both preff, mezz and senior loan. When can the pref equity investor be in the money, same for mezz, and senior loan. All in different scenarios, one with just a pref, one with just a mezz)
What I'm curious about is what can trigger equity to become diluted from the common shareholder. Let's say we have a $10,000,000 building with a cash flow of $500,000 at stabilization, a 5-cap. In a period of lowering values, but growing/stagnant income in what scenarios would the common equity become wiped out. I would assume that if he keeps paying the 12% pref(or whatever for this example), he would still technically own the building while maybe just not really getting a return?
Hey C.R.E. Shervin, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:
Fingers crossed that one of those helps you.
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