Underwrite the opportunity
We review sponsorship, property performance, business plan, and priorities before approaching the market.
Mezzanine financing
Mezzanine Debt & Preferred Equity Financing
Quick answer: Mezzanine and preferred equity fill the gap between senior debt and common equity in the commercial real estate capital stack. These subordinate capital positions allow borrowers to increase total leverage beyond what senior lenders provide, reducing the equity required for acquisitions, developments, and recapitalizations.
NationwideMarket coverage
1,000+Capital relationships
$2MM+CLS engagement floor
24 hoursInitial response
When it fits
When Mezzanine financing fits.
Mezzanine debt is secured by a pledge of ownership interest in the borrowing entity rather than a mortgage lien on the property, while preferred equity involves an actual equity investment with a preferred return. Both serve a similar function, increasing leverage and reducing sponsor equity requirements. These structures are commonly used for value-add acquisitions, development projects, and recapitalizations where senior lenders cap at 65-75% LTV.
Structure before pricing: leverage, recourse, reserves, prepayment, and closing certainty can matter as much as the headline coupon. We test those trade-offs before recommending a path.
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High-leverage acquisitions
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Development projects needing additional capital
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Value-add strategies with equity gap
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Recapitalizations and cash-out scenarios
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Joint venture equity structures
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Portfolio-level capital solutions
Lender selection
How We Source Mezzanine Capital
We do not treat the lender list as a directory. We target the desks whose current appetite fits the asset, sponsorship, market, and business plan, then compare the full execution, not only the rate.
| Capital source | Where it may fit |
|---|---|
| Debt Funds | Flexible capital for transitional, complex, leveraged, or time-sensitive executions where conventional credit boxes may not fit. |
| Private Equity Firms | Flexible capital for transitional, complex, leveraged, or time-sensitive executions where conventional credit boxes may not fit. |
| Family Offices | Program-specific capital evaluated for current appetite, proceeds, pricing, recourse, flexibility, and certainty of close. |
| Insurance Companies | Long-duration fixed-rate capital for high-quality assets and experienced sponsors, generally with conservative leverage. |
| Specialty Lenders | Program-specific capital evaluated for current appetite, proceeds, pricing, recourse, flexibility, and certainty of close. |
How we work
One process. Multiple capital sources.
We position the transaction, identify the lenders most likely to compete, and compare proposals on economics and execution risk, not just headline rate.
A well-structured financing process should create real choices for the borrower, not simply deliver the first term sheet.
Target the right lender desks
The transaction is matched to lenders whose current appetite fits the property, market, and structure.
Create a comparable field
Proposals are evaluated across rate, proceeds, recourse, reserves, prepayment, and closing certainty.
Manage execution through closing
We coordinate lender diligence, third-party reports, and issue resolution until the loan funds.
National reach
Market knowledge where the deal requires it.
We arrange mezzanine financing nationwide while matching each transaction to capital sources active in that market and property type.
Atlanta, GABoston, MAChicago, ILDallas, TXDenver, COHouston, TXLos Angeles, CAMiami, FLNashville, TNNew York, NYPhoenix, AZSan Diego, CASan Francisco, CASeattle, WATampa, FL
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Questions
Mezzanine financing, clarified.
The final structure depends on the asset, sponsorship, and market. These are the starting parameters we discuss most often.
Working out equity? Our commercial property down payment guide covers typical requirements by loan type: 20% to 30% conventional, 10% for SBA owner occupied.
Mezzanine financing is subordinate debt that sits between senior mortgage debt and equity in the capital stack. Secured by a pledge of ownership interest rather than a property lien, mezzanine debt allows borrowers to increase total leverage to 80-90% of value while reducing their equity requirement.
Mezzanine debt is a loan secured by a pledge of the borrower's ownership interest, with fixed payments and foreclosure rights. Preferred equity is an actual equity investment with a preferred return, participating in ownership rather than lending. Both fill the gap between senior debt and common equity.
Mezzanine loan rates typically range from 10% to 18%, reflecting the higher risk position behind senior debt. Rates depend on the total leverage, property type, sponsor strength, and market conditions. Preferred equity returns are similar but may include additional upside participation.
Consider mezzanine financing when you need higher leverage than senior lenders will provide alone, want to reduce your equity requirement for an acquisition or development, are executing a value-add or development strategy, or need to recapitalize and pull equity from an existing property.
Yes. Most senior lenders require approval of any subordinate financing, including mezzanine debt. This involves an intercreditor agreement between the senior and mezzanine lenders that outlines rights, remedies, and priorities in the event of default.
Let's evaluate the right mezzanine structure.
Share the property and financing request. We will respond within 24 hours with an initial view.