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Updated almost 5 years ago,
Distributions - does this OA match the summary?
Hi, newbie to syndication investments here. Would really appreciate some technical help with interpreting the OA language around distributions. It seems that the below verbiage allows the sponsor to participate in the preferred return, but the table in the deal summary on crowdstreet indicates they do not participate in the pref.
"Cash flow from operations in the ordinary course of the Property will ultimately be distributed
to Members in the following order:
-First, to all Members, until they receive an 8% Annual Non-Compounding Preferred Rate of
Return on all unreturned capital.
...
-Second, to all members pro rata in accordance with their respective interest (60% to investor
members and 40% to the Sponsor)."
This last sentence seems to lump "investor members" and "Sponsor" together under the umbrella of "all members", so that would mean since all Members participate in the pref, Sponsors get to participate. However, Member is capitalized in the first sentence and not the last, so that may be meaningful.
The table in the offering shows no sponsor participation in the pref:
Please help, and thanks!