What is a capital stack in senior living real estate development?
Direct answer
A capital stack is the mix of debt and equity that pays for a senior living project, ranked by who gets repaid first. From least to most risky, it typically includes senior debt, mezzanine debt, preferred equity and common equity. Lower layers are repaid first and earn lower returns.
What to know
Senior debt, such as a construction or bank loan, is secured by the property and paid first.
Mezzanine debt and preferred equity fill the gap between the loan and the sponsor's equity, at higher cost.
Common equity is paid last and takes the most risk, but keeps the upside.
Senior living projects also need equity for lease-up losses until occupancy stabilizes.
How Haven helps
Haven connects developers and owners with lenders and equity sources; Haven is not a lender. Read our senior housing capital stack guide.
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