Real Estate Capital

Mezzanine Debt

Mezzanine debt can help fill a capital stack when senior debt does not reach the level required for a transaction. It is a structured product and should be presented with precision.

Gap capitalStructured real estate capitalizationProjects needing leverage beyond senior debt alone

Where It May Fit

  • Sponsors assembling layered capital stacks
  • Transactions where senior debt leaves a meaningful gap
  • Borrowers comfortable with more structured execution

Common Project Uses

  • Gap capital
  • Structured real estate capitalization
  • Projects needing leverage beyond senior debt alone

Why Sponsors Consider It

  • Can reduce the amount of common equity required
  • Supports transactions that need a more layered structure
  • Useful when the deal works but the capital stack is incomplete

How a broker would position the opportunity

  • Review senior debt terms and the remaining capital need
  • Clarify intercreditor and structural considerations
  • Position the transaction around disciplined stack design

Questions sponsors commonly ask

Why does mezzanine debt require extra care in presentation?

Because structure, control, and stack alignment matter materially. Loose packaging can create confusion quickly.

Is it appropriate for every deal with a gap?

No. It makes sense only when the asset, sponsor, and overall stack can support that type of capital.

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