Gray Capital Launches Preferred Equity Program

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Dec 14, 2023, 10:00 ET

Midwest real estate firm uniquely positioned to offer strategic partnerships
with multifamily apartment operators seeking additional capital

INDIANAPOLIS , Dec. 14, 2023 /PRNewswire/ -- Gray Capital, a family-owned and operated private equity real estate firm specializing in the strategic investment and acquisition of multifamily apartments in growing markets throughout the Midwest, today announces a preferred equity program, designed to meet the unique needs of today's multifamily borrowers and investors.

Preferred equity is equity ownership that has special rights "preferred" over common equity, including a priority position to receive returns before common equity investors, reducing the overall risk profile of the investment. Gray Capital is an industry leader in aggregating and disseminating market trends, and it has been closely tracking and reporting on multifamily loan maturities, rent growth trends, and the implications of the rapid interest rate increases in 2022 and 2023. With this robust research, Gray Capital has identified a growing need for preferred equity in the multifamily space due to the changing interest rate climate and the dramatic shifts in the apartment market over the past three years.

With this new program, Gray Capital is providing solutions for owners and sponsors of stabilized, high-quality multifamily properties that have capital needs due to refinancing, needing to make up for a lower loan-to-value (LTV) ratio, rate cap expirations, asset acquisitions, lease-up phase of new developments, and similar challenges. Working with Gray Capital provides multifamily sponsors and borrowers with quick access to capital to bridge financing gaps or to overcome loan maturity obstacles, and Gray Capital's wide expertise in property management, construction, and asset management – along with their close relationships with top banks and lenders – allows for an array of full stack solutions for borrowers seeking to avoid unnecessary capital calls and dilution of returns.

Gray Capital's preferred equity program also allows multifamily investors to invest in multifamily properties at a time when low sales volumes for apartment properties point to a lack of opportunities for multifamily investors. The preferred equity program enables investors the opportunity to participate in the multifamily market, with some key differences from traditional LP investing that make preferred equity investments typically less risky.

"The preferred equity program is garnering unprecedented interest from equity investors," says Spencer Gray, CEO of Gray Capital. "There is a gap in the market and many are struggling with capital scarcity. We are filling this need by offering excellent risk-adjusted returns for investors along with solutions for multifamily borrowers in need of additional capital."

Gray Capital has a proven track record with over 6,700 units in the Gray Capital portfolio, equating to over $775 million in assets currently under management and $2.5B in transaction experience. Details for interested investors as well as borrowers/sponsors in search of capital or financing solutions can be found on the Gray Capital website at www.graycapitalllc.com.

ABOUT GRAY CAPITAL

Gray Capital LLC is a real estate investment firm that specializes in the acquisition and management of high-quality assets in growing Midwestern cities. The firm's investment strategy is opportunistic, with a focus on Core Plus and Value Add opportunities. Gray Capital leverages data, broker, lender, and owner relationships to source off-market opportunities, pursuing high-quality assets in financial distress as well as other cash-flowing multifamily properties. The firm's target demographic is above-median income, and it employs fixed-rate agency and HUD financing.

SOURCE Gray Capital