We define this lending product as aggressive 1^st, 2^nd or 3^rd mortgage financing on income-producing properties. Mezzanine financing is expensive, having 10% - 25% yield requirements depending on the risk profile of a transaction. It may also involve a cash flow or equity participation feature to the Lender. Examples include:

• a 2^nd or 3^rd mortgage on an apartment building to finance the cost of capital expenditures or the acquisition of another building,
• a 2^nd mortgage on an office building or strip plaza to finance the tenant improvements of a new tenant,
• aggressive 1^st mortgage financing for acquisition purposes,
• a cross-collateralized loan on a portfolio of properties designed to raise cash equity for a developer.

Mezzanine financing is often arranged with two lenders, one of whom ranks more senior than the other. Arranging mezzanine financing requires creativity and experience at structuring complex loan proposals. Our senior partners have extensive direct banking experience at major financial institutions (banks, trust and life companies) which gives us the knowledge and expertise to successfully arrange this type of financing.

The term for mezzanine financing tends to be less than 5 years – often the loan is outstanding only 12-18 months. It is generally repaid as soon as replacement funds are available in order to reduce the overall financing costs.

If you would like us to analyze your property on a preliminary basis (free of charge) to establish the mortgage amount which can be obtained:

• Click here for COMMERCIAL
• Click here for MULTI-RESIDENTIAL

If you would like to contact us or ask questions about MEZZANINE FINANCING on other types of properties, then click here.