Real Estate

Multifamily equity waterfall and cash out refinance question : CommercialRealEstate

Modeling a multifamily development deal with a typical 8% pref, 70/30, 60/40, 50/50 IRR waterfall. I’m wondering how you handle a perm refinance during the hold period that would return some or all investor capital?

Do you just pay the accumulated pref, then return capital (and stop the clock on the pref), and then wait until disposition to calculate any remaining proceeds split?

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