Egbert Perry, $3M of preferred equity, and a $40M deal in downtown Sacramento
Most people who raise money for real estate spend their careers chasing sponsors. Every so often you get the reverse: a sponsor with a fifty-year track record decides to test something new, and you are the one holding the door open.
That is roughly what happened when I worked on EVIVA Midtown with Egbert Perry and The Integral Group.
Perry is the founder of Integral, one of the most respected privately held development firms in the country, and he served on Fannie Mae's board from 2008, chairing it from 2014 to 2018. When you are twenty-something years into an industry and someone at that altitude picks up your call, you learn very quickly whether your process is real or whether you have just been performing one.
Here is how the deal actually got done.
1. I did not lead with the product. I led with the gap.
The mistake almost everyone makes when approaching an institutional-quality sponsor is showing up with a pitch. Nobody at that level needs your pitch. They need a specific piece of their capital stack solved, on a specific timeline, at a price they can live with.
EVIVA Midtown was a six-story, 118-unit ground-up multifamily project in downtown Sacramento with retail on the ground floor. Total project cost was roughly $41 million. Integral had the land, the entitlements, the construction debt, and the operating expertise. What they had was a gap in the middle of the stack: preferred equity, mid-seven figures, needed on a construction timeline that does not negotiate.
So I did not open with who I was. I opened with a number and a structure. That is the only conversation worth having.
2. I underwrote it before I asked for anything.
Before the first substantive call, I had built my own view of the deal: rent comps across Midtown and the broader Sacramento submarket, absorption assumptions, construction contingency, the debt terms, what the exit looked like at various cap rates, and where preferred equity sat if things went sideways.
Sacramento in 2015 and 2016 was not the obvious trade it looks like in hindsight. The consensus money was in the Bay Area. My thesis was straightforward: Bay Area rents had pushed a migration inland, Sacramento had almost no new Class A supply in the urban core, and the first genuinely new product to deliver would set the market. That thesis turned out to be right. The asset later traded for $53 million, at the time the highest price per unit ever paid for multifamily in that region.
The point is not that I was clever. The point is that when I got in the room, I was not asking questions a sponsor's analyst could answer. I was arguing about assumptions. That changes who you are to them.
3. I structured for the sponsor's problem, not mine.
Preferred equity is the right instrument here for a reason. Integral did not want to sell more common equity and dilute the upside on an asset they believed in. They wanted capital that behaved predictably, sat above the common, and got out when the project stabilized.
So that is what I built: preferred equity with a defined term of roughly eighteen to twenty-four months, monthly distributions, and a return profile that made sense to an individual investor without being priced so aggressively that it broke the sponsor's economics. Projected annualized return in the low twenties, cash-on-cash in the same range at stabilization.
The discipline is this: you do not get to design the security you would most like to sell. You design the one the sponsor can actually accept, then you go find people who want it.
4. I made the raise itself de-risked before I promised it.
This is the part people skip.
A sponsor of Integral's caliber is not primarily worried about your terms. They are worried about closing risk. If you commit to three million dollars and show up with one and a half, you have not just cost them money, you have cost them a construction schedule, and that is unforgivable.
So before I made any commitment on size, I had already run the raise backwards. I knew my investor base, I knew roughly how many of them took allocations in this profile, and I knew the average check. We offered the investment in twenty-thousand-dollar increments, which meant I was not depending on any single investor to make the raise. I could tell them, with numbers behind it, what the distribution of outcomes looked like.
The raise filled in eleven days.
Then we did it again. Integral came back for a follow-on preferred equity tranche to complete the building, and we placed that as well. The second raise is the one that mattered to me. The first one is a transaction. The second one is a relationship.
5. I stayed in the deal after the money moved.
The reason there was a second tranche is that nothing about the first one required a phone call from the sponsor to find out what was going on. Reporting went out. Distributions went out on time. When something moved on the construction side, investors heard it from me before they heard it anywhere else.
Capital raising is treated as a sales function by most of the industry. It is not. It is an operating function that happens to begin with a sale. The three million dollars was the easy part. The eighteen months after it were the part that earned the next deal.
What I took from it
Working with someone who sits at the top of the American housing finance system while simultaneously building product on the ground gives you a very particular education. Perry's firm operates at both ends: institutional discipline and genuine development risk. Nothing sloppy survives contact with that.
Three things stuck with me, and I still run them on every deal I touch, whether it is a startup round in Southeast Asia or a villa portfolio in Bali:
Solve a specific gap, not a general need. "We raise capital" is not a proposition. "You are short $3M of pref for eighteen months and I can close it in two weeks" is.
Bring a view, not a questionnaire. Anyone can ask a sponsor to explain their deal. Very few people can tell a sponsor something about their own market they had not weighted properly.
Underwrite your own raise as hard as you underwrite the asset. Your credibility is a function of the gap between what you promise and what you deliver. Keep that gap at zero and you never have to sell again.
The best capital partners are not the ones who move fastest. They are the ones who are the same on day four hundred as they were on day one.