Friday Frame: Preferred Equity in Focus
November 7, 2025
InvestmentNews: Why Preferred Equity Real Estate Investments Are Often Preferable
In his InvestmentNews interview, Rance Gregory, President of Northmarq Fund Management, explains how preferred equity fills the gap between mortgage debt and common equity in real estate investments. He describes it as offering the best of both worlds—providing priority returns and downside protection while still capturing equity-like upside. Gregory highlights that in today’s higher-rate environment, many property owners face financing shortfalls as loans mature, creating both borrower needs and investor opportunities. Northmarq’s preferred equity strategies help bridge this gap, delivering efficient, risk-adjusted returns backed by tangible real estate assets.
Why Preferred Equity Offers Smart Returns with Managed Risk
Optimizing Portfolio Diversification: Preferred equity provides investors a strategic middle ground between debt and equity—balancing risk, current income, and upside potential within real estate portfolios.
Bridging Market Gaps Efficiently: By filling financing shortfalls created by higher rates and maturing loans, preferred equity offers both borrowers and investors a flexible, risk-adjusted solution.
Topics Covered:
- What preferred equity is and how it fits in the capital stack
- Preferred equity’s balance of return potential and downside protection
- How market dislocation is creating new investment opportunities
Timestamps:
- Introductions (0:00–0:08)
- What Is Preferred Equity? (0:08–0:23)
- Core Real Estate Equity: Key Differences (0:24–1:07)
- Pros and Cons of Preferred Equity in Real Estate (1:08–1:50)
- Walking Through a Preferred Equity Example (1:51–2:40)
- Current Market Dynamics and the Role of Preferred Equity (2:41–3:30)
- How Northmarq Is Filling the Gap (3:31–4:31)
