Experienced real estate sponsors and GPs rely on Select Capital Funding to fill the equity gap, co-invest alongside their capital, and structure creative solutions for complex transactions. Whether you need GP co-investment capital, preferred equity, or mezzanine financing, we move at the speed your deals require — nationwide.
| Capital Layer | Position / Risk | Structure & Return Profile |
|---|---|---|
|
Senior Debt 60–70% of Cap Stack |
First Lien |
Lowest Rate (Banks, agencies, private lenders) |
|
Mezzanine Debt 10–15% |
Second Position |
Higher Rate (Private debt funds, mezzanine lenders) |
|
Preferred Equity 5–10% |
Equity Tier |
Preferred Return (Private equity, family offices) |
|
LP Common Equity 10–15% |
Equity Position |
Return + Upside (Limited partners, co-investors) |
|
GP / Sponsor Equity 5–10% |
Highest Risk |
Promote + Full Upside (General partner, developer, operator) ← SPONSOR EQUITY FINANCING TARGETS THIS LAYER |
Fill the equity gap when a deal's senior debt alone doesn't cover the capital stack and the sponsor needs to fund their required equity contribution without tying up all available reserves.
Access co-investment capital that sits alongside the sponsor's own equity, allowing experienced GPs to increase deal capacity and close more transactions simultaneously.
Bring in preferred equity capital that sits between senior debt and common equity — providing a flexible layer of financing without the full dilution of bringing in an additional LP.
Bridge the gap between senior debt and equity with mezzanine financing — structured to provide additional leverage while preserving the sponsor's equity position and promote.
Use sponsor equity financing to deploy your capital across more deals simultaneously — scaling your portfolio without being limited by the equity requirement of any single transaction.
Move quickly on competitive acquisitions where institutional equity partners can't execute in time — private capital sponsor equity solutions built for deal-speed.
Sponsor equity and GP co-investment capital for multifamily acquisitions, value-add deals, and new construction — structured to preserve your promote and close faster.
Creative equity capital solutions for commercial property acquisitions, repositioning, and development — flexible structuring for experienced sponsors and GPs.
Equity capital for experienced developers executing ground-up residential, multifamily, or commercial construction projects requiring sponsor equity funding at inception.
Structured preferred equity solutions that sit between senior debt and common equity — providing flexible capital without the full dilution of an additional limited partner.
Mezzanine debt that bridges the gap between senior financing and equity — structured to provide additional leverage while preserving sponsor control and upside participation.
Equity capital for sponsors acquiring and repositioning underperforming commercial or multifamily assets — structured to support the full value-add business plan through execution and exit.
Sponsor equity and preferred equity solutions for mixed-use developments combining residential, retail, and commercial components across urban and suburban markets.
Fast capital for experienced investors and sponsors executing residential fix and flip strategies — structured to maximize leverage and support repeat deal volume.
Share your deal summary — property type, capital stack, equity gap, business plan, sponsor background, and exit strategy — with our team.
Review We evaluate the overall deal quality, capital stack, sponsor experience, and equity structure to determine the right financing solution.
We design a sponsor equity financing structure — GP co-invest, preferred equity, mezzanine, or a combination — tailored to your deal and designed to preserve your promote.
Receive your customized equity term sheet fast — outlining structure, rate, term, and all material terms — so you can move toward closing with confidence.
Execute the financing, complete your capital stack, and deploy into your deal — with a capital partner built for the speed and complexity of institutional-grade CRE.
| Feature | Institutional Equity Partner | Select Capital Funding |
|---|---|---|
| Approval Timeline | Months of investment committee review | Same-day expression of interest |
| Minimum Deal Size | Often $25M+ minimums | $5M–$50M+ range — right-sized for your deal |
| Decision Makers | Investment committee — multiple layers | Experienced in-house team — direct decisions |
| Structuring Flexibility | Rigid institutional templates | GP co-invest, pref equity, mezz, JV — customized |
| Sponsor Control | Often requires significant governance rights | Structured to preserve sponsor control and promote |
| Documentation Required | Extensive institutional due diligence package | Streamlined — deal-quality focused |
| Relationship Orientation | Transactional — single deal focus | Long-term capital relationship — repeat deal capable |
| Speed to Close | Slow — multiple approval layers | Fast — built for deal momentum |
Sponsor equity real estate financing refers to capital solutions that help the general partner (GP) or “sponsor” in a commercial real estate deal fund their required equity contribution to the transaction. In most CRE deals, the sponsor is expected to contribute 5–20% of the total equity stack alongside the senior debt and limited partner (LP) capital. Sponsor equity financing provides the GP with external capital to meet that requirement — either through a GP co-invest loan, preferred equity, mezzanine financing, or a joint venture equity arrangement — without forcing the sponsor to fully exhaust their own balance sheet on a single deal.
In commercial real estate, a “sponsor” is the general partner (GP), lead developer, or operating partner who sources the investment opportunity, structures the deal, arranges the financing, and manages the asset through its business plan. The sponsor is typically responsible for finding the deal, negotiating acquisition, raising LP capital, securing debt financing, executing the value-add or development strategy, and ultimately achieving the exit. In exchange for this role, the sponsor typically earns a promote — a disproportionate share of profits above a specified return threshold — in addition to their pro-rata equity return.
In a typical CRE joint venture structure, the general partner (GP) and limited partners (LPs) both contribute equity to the deal. LP equity comes from passive investors who provide the majority of the equity capital but do not manage the asset. GP equity is the sponsor’s own contribution — typically a smaller percentage of total equity (often 5–20%) — which demonstrates the sponsor’s commitment to the deal and aligns their interests with LP investors. Sponsor equity financing helps GPs fund their contribution when they are capital-light or wish to preserve liquidity for other opportunities.
Preferred equity is a form of capital that sits between senior debt and common equity in the capital stack. Unlike a loan, preferred equity is technically an equity position — but it carries a preferred return (a fixed or variable rate of return that must be paid before common equity receives distributions) and may include profit participation features. Preferred equity is often used in real estate deals to bridge the gap between the senior loan amount and the total equity required, without adding a second lien (which many senior lenders prohibit). It gives capital providers a higher-priority position than common equity investors while providing sponsors additional capital at a middle layer of the stack.
Mezzanine financing is a form of debt that sits between the senior mortgage and the equity in a deal’s capital stack. Unlike preferred equity — which is structured as equity — mezzanine debt is a loan, typically secured by a pledge of the borrower’s ownership interest in the property-owning entity rather than a direct lien on the real property itself. Mezzanine financing provides additional leverage above the senior loan amount, is typically priced higher than senior debt to reflect its subordinate position, and may include profit participation features such as equity kickers. It is commonly used in CRE transactions to reduce the equity required at closing while increasing overall leverage.
A GP co-investment loan — sometimes called a “GP co-invest” or “sponsor co-invest financing” — is a loan made specifically to the general partner to fund their required equity contribution to a real estate deal. Rather than using their own balance sheet capital for the GP equity requirement, the sponsor borrows the funds from a private capital provider, deploys it as their equity contribution to the deal, and repays the loan from their profit distributions, promote proceeds, or a refinancing event. GP co-invest loans allow experienced sponsors to close more deals simultaneously without being capital-constrained by the equity requirements of any individual transaction.
One of the most powerful applications of sponsor equity financing is deal capacity expansion. Without access to external equity capital, a sponsor’s ability to grow their portfolio is directly limited by how much equity they can self-fund across multiple simultaneous transactions. Sponsor equity financing breaks that constraint — by providing co-invest capital or preferred equity solutions, experienced GPs can deploy their own capital across more deals at once, increase portfolio velocity, and grow their AUM and equity base faster than would be possible relying solely on their balance sheet.
Select Capital Funding works with experienced sponsors across a broad range of commercial real estate asset classes, including:
Each deal is evaluated based on the asset quality, the sponsor’s experience and track record, the business plan, the capital stack, and the proposed exit strategy.
The strongest candidates for sponsor equity financing typically share several characteristics: a demonstrated track record of successfully executing comparable CRE transactions, a clearly defined business plan with realistic assumptions and a credible exit strategy, a deal with strong fundamental economics and a logical use of the capital stack, and the ability to contribute meaningful co-investment or equity into the transaction. Sponsor equity financing is designed for experienced operators — not first-time developers — and deal quality, sponsor credibility, and exit viability are the primary underwriting considerations.
Raising additional LP capital changes the economics of the deal for the sponsor — diluting the promote, requiring more investor management, and extending the capital raise timeline. Sponsor equity financing, by contrast, is a structured capital solution that provides the GP with what they need to meet their equity requirement without necessarily changing the LP structure or diluting the existing waterfall. Depending on the structure used — whether a co-invest loan, preferred equity, or mezzanine — the sponsor may retain full control of the asset and preserve their full promote above the preferred return threshold.
Select Capital Funding provides same-day expressions of interest on most transactions. For deals with a complete deal package provided upfront — including property information, the capital stack, the business plan, sponsor background, and exit strategy — the process can move from initial review to term sheet delivery quickly, keeping your deal timeline intact. Speed is a core advantage of working with a private capital provider versus an institutional equity partner, whose approval processes typically involve multiple layers of committee review and can take months.
The initial review process typically requires the following information:
Providing a well-organized deal package at the outset allows our team to respond quickly and advance toward a term sheet without unnecessary delays.
Whether you’re filling an equity gap, structuring a co-investment, or looking for a preferred equity or mezzanine partner, our team can structure the right solution around your deal, your promote, and your timeline — nationwide.
