What are the controls the Fund has on a preferred equity investment?
The Fund’s preferred equity investments are structured as interests in entities that own real estate investments, either directly or indirectly. The Fund’s interests are senior with respect to distributions, redemption rights, and liquidation rights compared to the entities’ common equity. In the event of a default, a change-of-control event occurs, allowing the Fund to assume control of the property-owning entity. Consequently, the common equity owners lose their operational input rights and become passive investors.