capital stack

capital stack

A description of the totality of capital invested in a project, including pure debt, hybrid debt,and equity.The stack is described as containing the most risk at the top,traveling down the stack to the position with the least risk. Higher positions in the stack expect higher returns for their capital because of the higher risk.Lenders and equity stakeholders are highly sensitive to their position in the stack.Typically, the stack is arranged as follows.

1. Sponsor equity
2. Preferred equity
3. Mezzanine investors (hybrid debt and equity)
4. Second and other junior mortgages
5. Investment-grade first mortgages

References in periodicals archive ?
The combination of Twain's C-PACE and Historic Tax Credit investment represents more than 30% of the project's total capital stack.
The firm has invested in virtually every class of real estate on a global basis, opportunistically shifting geographies and changing positions in the capital stack as risk-reward dynamics evolve.
Originated by Dan Sacks and Eric Rosenstock, the financing involved a complex capital stack and new operating ownership structure to help the properties return to profitability.
Developers have to come up with what is known as a capital stack or layers of financial sources that contribute to the cost of a real estate project.
Over time, security tokens stand a good chance of becoming accepted parts of the capital stack, just like debt and equity.
Current issuer TTM NCF DSCR is 2.69x on the trust component, 2.15x on the entire capital stack.
"A complex capital stack with a variety of equity sources was needed in order to facilitate the deep renovation and stabilization that the projects required.
This deal represented an opportunity for us to raise the entire capital stack including debt and equity for a valued client on high quality real estate, Weinberg said.
"I think that the biggest thing that we have for us is that we came in with the goal of stabilizing the asset and refinancing the capital stack," said Jason Pappas, chairman of Maryland Proton Treatment Holdings.
Collective investment vehicles will also emerge as debt providers, as investors see debt as an attractive capital stack for taking real estate exposure, especially given the interest rate cycle we are entering in" he added.
PFL has always followed a partnership approach and will follow similar approach with respect to investments in hospitality with the ability to participate across the entire capital stack, be it senior debt opportunities, mezzanine funding, last mile funding towards completion and acquisition financing opportunities in the sector.
"With our decades of expertise, we will assist in finding the most efficient capital stack for your project."