Apartment Syndication Returns

[Mark Pinkston]

What sort of preferred returns are you paying your investors on multi-family/Commercial real estate deals?

[Brock Mogensen]

I'd say most common is 6-8% for the preferred return. But when analyzing the deal, you need to also look at what the GP/LP equity split is. Generally if there is a higher preferred return the GP's take a bigger chunk of the equity split. To make it even more confusing there can also be hurdles associated with the GP/LP splits, where the splits change after a certain hurdle is achieved (usually tied to IRR). These structures can get very confusing, definitely suggest familiarizing yourself with how it works and investing with syndicators you trust.