Mezzanine financing is a form of debt positioned between senior debt (the first mortgage) and equity in a deal's capital structure.
Log in to followSmall one, and I mostly want to write down how it went because everything I read about mezz before this was written for people moving ten times the money. A sponsor I'd co-investe…
Reading a private credit vehicle's offering memorandum and the structure chart puts whole loans and B pieces inside the REIT and pushes mezzanine into a parallel vehicle. The tax…
A sponsor I've been tracking is syndicating a $3.1M mezz piece behind a $9.8M senior on a grocery anchored strip in a secondary market. Minimum is $250k and I'd be taking one unit…
I've been reading a mezz loan package for practice, no money in it, and the collateral section stopped me. The senior lender has a mortgage on the property. The mezz lender has a…
Two things I read that don't sit together. One article described mezzanine debt as basically a second mortgage on commercial property. Another said the mezz lender doesn't get a l…
I've been underwriting a $4.5M gap on an office to residential conversion for six weeks and the sponsor has offered me two ways in. Either a mezz position at 12.5% current, 1 poin…
Dead deal, 84 units, and the money is gone. Writing it down while the sequence is still clear. Purchase price $9.4m. First quote from the senior lender was 65% of cost, so $6.1m,…
Reading an intercreditor draft on a recap I'm looking at, $34m value, $22m senior, $4.5m mezz behind it at 12 and a half. The coupon is the part everyone argues about and I think…
I'm doing the analyst work on a $32M refinance for a small sponsor and the mezz piece is where I'm stuck. Senior is quoted at 58% of value, mezz takes it to 76%, coupon 12.75% wit…
$16m acquisition, senior quoted $12m at 6.75 with a 1.20x DSCR test, and I'm $2.5m short of closing. Found a group willing to do it as a mezz loan at 12 with 9 current and 3 accru…
A client of mine described a deal as "senior at 60, mezz to 78, then equity" and I nodded like I understood. I get that it's layers. What I don't get is what the layers actually m…
I put $90k into a $3.2m mezzanine tranche on a 112-unit workforce apartment deal, expecting a 36 month hold. The sponsor sold at month 14 and I got paid $27k on top of my principa…
Every mezz summary I read lists the conversion to equity as one of the protections. The mezz lender can end up owning the ownership interest in the entity that holds the property,…
Mezz targets 10 to 15 percent. Common equity in the same deals is usually pitched at high teens and up. So you're giving up several hundred basis points of upside in exchange for…
$2.5m into a $6.5m mezz tranche, recovered $560k in month 31. The sequence matters more than the number, because the place I got it wrong was not where I expected. Deal shape: 190…
Writing this out because I'd have wanted to read it two years ago. A sponsor I'd met through the management side raised a $2.6M mezz piece behind a $7.9M senior on a 60 unit value…
Got taken out at par plus exit fee last month on a mezz participation I put $125k into 22 months ago. Writing up the part that nearly killed it, because it wasn't in the mezz docu…
Went through a fund deck last week where the manager made a whole selling point out of the fact that REITs are cautious about holding mezz. The pitch was that the rules explicitly…
Mezzanine debt has been on my mind for a few weeks and I want to test something with people who actually do it. What I understand so far. Mezz sits between the first mortgage and…
Sizing exercise I keep landing on from four directions and getting four answers. Suburban office-to-flex conversion, stabilized, in-place NOI $2.35m. Maturing loan at $24m written…