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The increased capital flowing to the preferred equity space far outweighs the volume of available deals. Real estate investors looking for attractive returns along with added risk protection are finding it in the middle of the capital stack. Capital is pouring into the preferred equity space, resulting in a highly competitive market that is putting pressure on returns and forcing investors to work harder to find good deals. Interest in preferred equity deals isn’t entirely new, but momentum has picked up of late. “It started to get big five to six years ago and it has blown up even more in the last year or two,” says Noah Miller, vice president at Gelt Financial, a private real estate investment firm based in Delray Beach, Fla. Gelt Financial invests at different points in the real estate capital stack, including preferred equity, mezzanine and bridge loans and senior mortgages. ....