We arrange mezzanine loans up to 90% Loan-to-Cost
Mezzanine Debt (“Mezz”) is junior to the senior debt in order of payment priority. After a borrower funds their operating expenses and the senior debt payment, all income must pay the fixed coupon of the mezzanine debt. If a borrower is unable to cover their debt service, the mezzanine lender typically has the ability to take control of the property quickly. The senior debt and mezzanine lenders typically enter into an inter-creditor agreement to govern control rights, among other things. Mezzanine debt typically has a higher rate of return than senior debt but lower than equity.