What is the difference between debt and equity investments?

Our investments in real estate projects are typically structured as either debt or equity. 

Debt represents loans to the owner of a property. Debt investments are generally considered to be lower risk with a lower return potential since the project’s sponsor must pay us a fixed rate of return before they can earn a return for themselves, and their equity provides us with a cushion against losses. 

Equity represents ownership of the property. Equity investments generate returns through rental income if the property is occupied, and the potential for long-term upside by selling the property for more than we bought it. 

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