EQUITY INVESTMENTS
Our family run firm has been involved in over a half a billion dollars of commercial real estate investments and sat in every seat at the table. We pride ourselves on getting good deals done with the right capital solutions.
With hybrid equity, the common equity investors get “caught up” once the hybrid equity investors achieve certain return hurdles. After the last hurdle, the hybrid and common equity investors share profits according to the predetermined splits.
Because the Common Equity principal and cashflow distributions sit only behind Velocity Capital Partners’ principal and the 6-8% current-pay distributions, this unique structure is far less risky for common equity LPs compared to sitting behind traditional preferred equities’ mid-teens compounding preferred return.
Hybrid Equity
Our Investment Structure:
As a family run firm, our company values guide everything from our investment thesis to our day-to-day approach.
Our Values Based Approach
RELATIONSHIPS FIRST
We genuinely care about, and actively listen to, our partners and investors
UNWAVERING ETHICS
Actions consistent with high moral standards and a commitment to fiduciary duty
EVERYBODY WINS
Aligned incentives to ensure mutual respect and benefit for everyone involved
DISCIPLINED APPROACH
Rigorously adhere to our due diligence and operational standards
Featured Transactions
Investment Terms
Investment Size:
$2 – 8mm
Term Length:
2 – 5 years
Max Leverage:
Lesser of 50% of capital or 85% LTC
Fees:
1.5% capital market advisory: 1.5% exit fee
Hurdles:
1. Current Pay 2. Preferred Return 3. Cap
Current | Pref | Cap:
6 – 8% | 13% | Deal Specific
Participation:
Velocity entitled to 50% of pro rata profits until cap
Capital Markets Advisory fee waived if Velocity Capital Partners is engaged as the debt broker. Return percentages calculated using compounded annual growth rate. Compliant Fannie Mae, Freddie Mac, and most other lenders.
Investment Criteria
Minimum deal size of $2mm
1990 or newer vintage preferred, exceptions subject to more stringent terms and underwriting.
Properties must be located in a market with >75k residents or within commuting distance of a major metro.
Ground up construction must be shovel ready by close. No hotel or office conversions.
Preferred sponsor will be local to the subject market and/or have a demonstrated history of successful operations in the subject market (case by case exceptions for light value add, concession burn-off and stabilized deals; no exceptions for gut rehab or ground up)
Must have 3rd party management (pre existing relationship strongly preferred on smaller properties) or well-established in-house management company.
