Preferred return in a multifamily syndication

[Evan Loader]

For those of you invested in syndications with preferred returns, how does your sponsor communicate and track that preferred return if it is deferred? In the early stages of a deal after close, the preferred return in my experience is either lower in years 1/2 or deferred until the property is stabilized, then paid out at an agreed upon date, at a refi/capital event or upon selling the property. In my experience, this would usually be communicated ahead of time before the deal closes, as it is planned for. 

However, with COVID-19 and moratoriums on evictions in many states, this has to change the projections a bit, not only on a preferred return but on distributions overall. I assume that sponsors will prefer to hold onto more reserves until everything stabilizes by deferring some preferred returns and regular distributions, which seems to be a perfectly rational response. It would make no sense to continue distributions as if nothing is wrong, putting the entire deal at risk of failure or reduced returns. The question I have is, how do sponsors keep track of a preferred return if it is delayed/accrued vs regularly paid out? Sponsors out there, do you have a process in place to address this?