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You were the Common Equity Investor in an office building that was purchased for $1...

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Accounting

You were the Common Equity Investor in an office building that was purchased for $1 million in 2006. You invested 100k, the preferred investor invested 100k, the mezzanine lender loaned $100k, the Junior Debt lender loaned $200k and the Senior Debt lender loaned $500k. The hold period was supposed to be for 5 years. The CE investor was projected to have IRR returns of 15% and the PE investor was projecting to have returns of 12%. After the financial crash in 2008 2 years later the property fell into distress because of failing businesses and you are forced to sell the property for a net amount of $750k. Assuming all debt payments were made and were interest only so the balances staid the same while the property was owned how would the waterfall flow to each lender and investor?

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