Learning Resources - CRE Capital Stack
I’m a first year Debt & Equity Analyst for a CRE brokerage. As the year has been a little slow, it’s been a little difficult to wrap my hands around the various debt & equity executions with little reps. I was curious if anyone knew of any great books or other resources which go into detail of various executions?
Such as loan structures, executions (CMBS, BANK, GSE, LIFECO, Etc), debt(perm, construction to perm, bridge, etc), equity (Pref, Mezz, GP, LP, etc)
I’d appreciate any help!!
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Also would want to know this. Following
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Interested in recommendations for resources on this as well - following.
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Not an expert, but maybe try to understand the cost of capital and what rates you may get. From my limited knowledge CMBS seems to have a lower rate, but more restrictive (ie even during covid heard landlords had to pay interest, due to backer (bondholders)). GSE is government and longer term agency loans with lower rates, but maybe only apply to certain multifamily deals? Lifeco I generally think low cost of capital so usually looking for a safer investment to lend against at a lower rate, not going to get the most proceeds. Bank general financing probably going there for most deals unless you can't find many then maybe you go to a debt fund.
Debt - construction high rate, low term (2-3 years), funding as needed. Bridge maybe after construction loan but not fully stabilized, perm safest and long term with lowest rate.
Equity - GP little cash in deal, most upside can get fees. LP most of equity (think 90-95% of equity requirement) with different structures for deal performance. Mezz I think of as more debt thats like equity but with a fixed term. Pref equity in the middle between LP and debt, higher return.
I think for a lot of these use google, check out ACRE, other posts here, or RE finance textbooks. Agency check HUD/and the GSE orgs. Debt look up real estate debt funding pdf/white paper should be a few. But also can learn just by looking up capital stack.
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