Small Balance Commercial Real Estate Capital Solutions
Shadowcast provides flexible preferred equity solutions to support commercial real estate sponsors in need of additional capital for value-add acquisitions, developments, refi shortfalls and debt extensions. We partner with private investors to deliver reliable, structured capital when traditional financing falls short — including situations involving maturing debt, constrained refinancing options, or lender equity gaps.
We specialize in small-balance investments ranging from $250,000 to $2.5 million across multifamily, self-storage and multi-tenant commercial (industrial and retail) with a particular focus on sponsors in Montana and the Intermountain West.
Our preferred equity enables sponsors to meet capital requirements while maintaining full project control and long-term ownership. With a typical two-year minimum term aligned with construction or (re)stabilization timelines, sponsors redeem our investment once the asset is positioned for permanent financing or sale.
Using discretionary private capital and a deal-by-deal underwriting approach, Shadowcast offers speed, certainty, and structural flexibility — helping sponsors reduce execution risk, preserve upside, and avoid the burden of raising additional common equity.
Preferred Equity 101
- Preferred equity = ‘Rented equity’. Sponsor ‘rents’ equity to affordably increase leverage, in exchange for preferred returns and priority of repayment upon refi or sale.
- Behaves like mezz debt but recognized as equity by lender. Circumvents restrictions on subordinate debt. No profit participation
- Collateral: structured with a pledge of the common equity with remedies written into entity operating agreement.
- Less expensive than traditional equity and, combined with low-cost senior debt, provides a comparably low overall cost of capital, while eliminating need for additional equity raise.
- Sponsor maintains control, strategic decision making and future upside potential
- No profit participation. Upon repayment of Shadowcast’s accrued returns and principle, our ‘rented equity’ stake reverts to Sponsor and common equity holders.
