Understanding Investment Risk: Where Are You in the Capital Stack?

News / Video - 01/25/2022

In 2021, Avatar Financial Group LLC (Avatar) launched a new commercial mortgage fund to provide accredited investors the opportunity to invest in a pool of loans across a variety of commercial real estate asset types. In just seven months since inception, Avatar raised $50 million.

Mortgage REITs, like Avatar’s, may uniquely position investors in the most senior position in the capital stack, however, different types of commercial real estate investments place an investor at different positions, each with different risk implications. When it comes to evaluating investment opportunities, investors should carefully weigh their position in the capital stack to better understand the sequence of distributions should a property be profitable, or their loss-risk.

T.R. Hazelrigg IV, President & Co-Founder of Avatar joins Jerry Zevenbergen, Avatar CEO & Co-Founder, in an in-depth discussion on the capital stack, how distributions from successful properties occur and in what sequence, and an overview of typical capital stack positions in commercial real estate investing.

Investors interested in Avatar Commercial Mortgage REIT LLC should carefully review the Private Placement Memorandum, which explains, in detail, the structure, fees and risks associated with this type of investment. Avatar Financial Group LLC serves as the loan originator of the Fund and services the portfolio.

* Verivest does not offer any investment advice, and none of the podcasts, webinars and other materials advertised here should be considered investment advice.



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