You would likely receive similar push-back if location is the reason they are not approving the transaction. Preferred equity is somewhat similar to mezzanine debt in that it is a different form of financing. There are many different options when it comes to structuring preferred equity financing, but it usually entails a higher preferred return and some limitation on deal upside. In sum, if location is the real issue, restructuring and revamping the capital stack may not be a workable solution.
